China Cars to Come Into the States through Some Side Doors
We have speculated as to when Chinese cars will be sold in the U.S. under their own brands, and although some of the Chinese car companies have made some statements regarding when they’ll start retailing their own cars in the States, those timelines now appear to have been overly optimistic.
But, cars made in China will soon be sold in the U.S., and those cars will be retailed by some familiar brands in the U.S. If you’re a consumer in the U.S., you will soon be able to buy a Chinese-made car, even if it’s not branded as such.
Chrysler has confirmed that it will sell a small car made by Chinese car company Chery under its Dodge brand as soon as the car is able to pass emissions and safety requirements and is ready for launch. The Chery-built car will be sold worldwide, including it’s projected main market, the United States. Honda is developing a separate brand though a joint venture with one of its Chinese partners that may be sold in both Europe and North America. It should also be noted that Honda is already churning out Honda Jazz (called the Honda Fit here) models in one their factories in China that are being sold in the EU. There is a lot of chatter that General Motors is considering not only letting their wildly successful Buick subsidiary in China design their next Buick model, but is exploring the possibility of having their factory there build the car for export to North America.
And VW announced last week that a new model based on the next-generation Passat will be built by VW and Volkswagen Shanghai (their joint venture partner in China) and sold in both China and North America. VW says that Chinese and North American tastes are very similar. Another version of the next Passat will be offered for sale in Europe.
The Chinese are treading a familiar path in offering their cars through an established brand here in the U.S.; some of the Japanese auto producers and Korean companies did the same thing previously. The same type of arrangement exists today between GM and GM Daewoo whereby GM retails a sub-compact produced by Daewoo as the Chevrolet Aveo in the U.S.
These “big brother” partnerships generally accomplished two important things for the Asian car companies; one, they were able to sell more of their vehicles, which is always good, and two, they “went to school” on their American partners, learning how to set up and manage a retail dealer network in the States and gaining valuable insights in how consumers react to their products. And all without any negative consequences to their brand, in the instance that they get something wrong.
If this seems like a roundabout way to enter a market, bear in mind that the risks of making a bad first impression in a market as important as U.S. are of considerable consequence. The negative repercussions can last a very long time. Just ask Hyundai, they’ll tell you.
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