Editor's Notebook: The Chinese are Coming

Editor’s Notebook: The Chinese are Coming

Chinese auto makers, Chery and Geely, will likely have a presence in the U.S., but the question is when? News reports in February indicated that both companies hit snags — Chery due to a lack of money and Geely because of the inability to pass trial runs of U.S. emissions and side-crash tests. In the latter case, Geely engineers will have to redesign their cars and engines to make them viable in the U.S.

The Chery saga goes like this. Veteran auto entrepreneur Malcolm Bricklin made a deal with China’s Chery Automotive. Apparently, he had been trying to raise $200 million for the joint venture, $2 million from each dealer who signed up. While he plans to begin selling Chery vehicles in the U.S. late next year, auto industry consultants indicate that 2008 or 2009 is a more realistic target. Geely, whose problems could be more prohibitive, was trying to peg a $10,000 U.S. selling price, which may be a long shot if it has to redesign its engines. Buying engines from another maker would only boost costs and elevate the selling price.

Geely’s chairman, however, denies reports that it delayed plans to sell cars to the U.S. market because it failed to pass vehicle tests. He claims that Geely has conducted only rollover tests so far in the U.S. and passed them. Beyond overcoming the testing issues, Geely also intends to conduct more market research and make vehicle improvements to suit market demand. If and when Geely does arrive in the U.S., the company plans to sell 25,000 cars in the first year.

So, what does all of this mean to the market?

  • Chinese auto makers will likely face a significant amount of consumer resistance, because of their newness to the market, and the fact that they’ll have to earn a level of trust common to established, proven brands.

  • With that said, you might have to field questions from your current customers who may be curious about these new market entries.

  • U.S. automakers will have more time before they have to deal with the effects of another wave of cheaper vehicles on market selling prices.

  • Aftermarket suppliers won’t have to readily contend with the R&D that comes with providing new vehicle application coverage.

  • Distributors won’t have to add new SKU coverage and shelf space for Chery or Geely aftermarket replacement parts any time soon.

  • Down the road, import specialists may have to gear up to service and repair a new vehicle fleet.

There’s more to garnering mass-market appeal and acceptance than merely the vehicle frame and innards. Unless the Chinese can follow the Japanese’s highly successful model of truly understanding the U.S. market and building vehicles accordingly, their seemingly troublesome emissions and side-crash test woes will seem miniscule.

You May Also Like

PRT Showing Complete Line of Shocks at HDAW ‘23

The brand is presenting multiple applications for heavy and medium duty vehicles.

PRT HEAVY DUTY, a brand of ADD USA group, will be exhibiting an extensive portfolio of heavy-duty applications at HDAW - Booth 1731, in the Heavy-Duty Aftermarket Week ‘23. The brand will be presenting leading coverage of 100% gas-charged shocks for trucks, trailers, buses and commercial vehicles. The company is also displaying multiple applications for Medium Duty vehicles such as Motor Homes, Pickups and Cargo vans, among others.

Winter ASE Registration Open

Three options offered for testing and recertification.

Federated 50/50 Challenge Awards Over a Hundred Prizes

Federated conducted the 50/50 Challenge to recognize and thank ASE-certified automotive service professionals.

Mitchell 1, ASE Present 2022 Technician of the Future Award

Nathanial “Nate” Nie of Mission Viejo, California, was named the 2022 Mitchell 1 / National Institute for ASE Technician of the Future.

Schaeffler Group Releases Series of LuK TSBs

In conjunction with its REPXPERT service brand, Schaeffler provides technical tips and service information for LuK products.

Other Posts

Inspection Intervals

If you fail to inspect an item on the schedule, you could miss out on maintenance opportunities.

GB Remanufacturing Releases 2022 Year in Review

The GB Reman 2022 Year in Review is available for download.

Survey Shows Greater Trust in Service Professionals

More than 70% reported increased levels of trust in repair shops and/or service technicians.

SMP Closes the Year with 214 New Part Numbers

SMP says it is committed to providing replacement parts for hybrids and EVs through its Standard and Four Seasons brands.