Management: The Chinese are Coming

Management: 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.

By Mary DellaValle
Editor, IMPORTCAR

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 (at right) 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 (at right), 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

Standard Motor Products Expands Emission Control Program

SMP’s program features more than 3,500 parts, including EVAP, EGR and positive crankcase ventilation products.

Standard Motor Products, Inc. (SMP) announced it is expanding its Emission Control program, which includes evaporative emission control (EVAP), exhaust gas recirculation (EGR) and positive crankcase ventilation emission control systems.

Standard’s EVAP program features over 1,300 part numbers and includes Vapor Canister Purge Pumps, Vapor Canister Vent Hoses, Vapor Canister Purge Valve Hoses, Canister Vent Solenoids, Fuel Vapor Canisters, Canister Vent Valves, Canister Purge Valves, Fuel Vapor Leak Detection Pumps, Canister Purge Solenoids and more. Recently released Standard EVAP components include Vapor Canister Purge Pumps for more than 2 million General Motors SUVs, like the 2023-21 Chevrolet Trailblazer. Fuel Vapor Canisters have been added recently for the 2022-20 Ford Transit, 2023-19 Nissan Altima and more. Canister Purge Solenoids are new for Dodge and Jeep vehicles through 2024.

CAWA Accepting Applications for MPA Scholarship Awards

The deadline for submitting applications for the MPA Selwyn Joffe Awards is May 31.

Repairify Announces Executive Leadership Changes

The company has named Craig Edmonds as president of asTech among other executive appointments.

KYB Launches New Digital Catalog App

The updated app provides much more accurate part number recommendations, according to KYB.

PRT Launches 22 New Products on Complete Strut Assemblies

The new items come to expand the PRT portfolio in North American Market and represents more than 12 Million vehicles in new coverage.

Other Posts

BendPak to Debut Eight-Armed Car Lift Concept at NADA

Octa-Flex improves technician productivity, convenience and ergonomics, according to BendPak.

PRT Heavy Duty Presenting Innovations at HDAW ‘24

PRT is exhibiting a full line of shocks and air springs for heavy-duty applications.

RNR Tire Express Rides Franchise Momentum Into 2024 

The company said it had a year of growth, with the opening of 15 new franchise locations.

Transtar Industries Launches Remanned Transmission Products

The company provides a sustainable solution for transmission products and simplified complex vehicle repair.