Now the Answer Comes, and Quickly

It seems as if this is turning into the All-China Cars site this week, but things keep happening that concern the Chinese manufacturers, so here we are again.

On April 17, I posed the question regarding when a Chinese car company would be selling their cars in the U.S. or Europe in substantial numbers under their own brand name. I offered the opinion in the article that it wouldn’t happen within two years, and would probably be around five years.

Three days ago, on April 23, Brilliance Jinbei of Shanghai, China released a statement saying that they would be selling their BS6 sedan in the United States by the end of 2007 or the beginning of 2008, with further sales of over 50,000 units including a coupe, compact car and SUV projected over the next two years. The company stated that it will also simultaneously sell up to 150,000 units in Europe. That’s simultaneous, as in “at the same time”. How will they do this? I don’t know, and I can’t see how they have the capacity to do it, but they are confident, if nothing else. The details concerning the sales, service and parts infrastructure needed to support sales of this magnitude will be announced later, Brilliance officials say. Almost as an aside, Brilliance Jinbei President Zhigang Liu mentioned that an acquisition of another car company, Chinese or otherwise, was certainly a possibility. Since foreign reserves in China currently stand at $1.2 trillion, and both the Chinese government and banks are awash in cash, there is certainly no reason to doubt that Brilliance could acquire any capital it needs to expand.

Brilliance currently makes its own vehicles, as well as BMWs and Minis for BMW in China. Their output last year was approximately 200,000 vehicles, including the BMWs and Minis made under contract. Brilliance projects production of 300,000 units in 2007 and a little over 500,000 units by 2015.

But, wait, there’s more.

On the very same day, an article appeared in Automotive News that stated that Changfeng Motor Co. plans to be selling a car in the U.S. within three years that isn’t even through development yet. A scant six years ago, Changfeng was a tiny company owned by the Chinese Army that made a single, basic SUV for the military. Production was around 4000 vehicles annually. Now, they have production capacity of 150,000 units annually, they are an independent company listed on China’s stock exchange, and have a partnership deal with Mitsubishi. Changfeng’s CEO, an affable ex-army colonel named Chen Zheng, states that Changfeng will compete with all of the world’s automakers.

So much for my market forecasting skills.

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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3 Comments

  1. I wouldn’t worry about your forecasting skills until there is actually a real car for sale on US soil. Yes, it’s going to happen sooner or later, but Malcolm Bricklin also said that he’d be selling Cherys in the US by now, and I haven’t seen any Cherys in the US.

    My guess is that your original prediction is still going to prove accurate. After the 2-5 years, though, it’s going to be a flood, not a trickle.

    Chinese manufacturers have said that they do not have the in-house management or engineering talent to build cars that will be acceptable to Western consumers. They’re still learning tons from their mandatory joint ventures, but I don’t think they are there yet. I’ve yet to see a Chinese-brand vehicle pass a crash test.

  2. This is the first time I’ve visited you’re website, Brendan.

    Nice job! Well written articles with interesting information are a frequent.

    Cheers,

    Bruce McCulloch (AKA “7.3 AMG”)

  3. Thanks – very kind of you. Glad you like the site.

    Brendan Moore

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