Commentary from Automotive News China

Dreams of Selling Chinese Cars in the U.S. and Europe Are Fading

BYD, Brilliance, Chery and Geely Have Made Little Progress in Western Markets, Says Yang Jian, the Managing Editor of Automotive News China

By Published on .

BEIJING ( -- Two Chinese car giants, BYD Auto Co. and Brilliance Jinbei Automotive Co., were very pleased when they were granted space on the main floor of the Cobo Center for the 2009 Detroit auto show in January.

In past years, Chinese automakers were allocated undesirable space in the basement or lobby.

But better positions at one of the world's leading car shows could be the only progress Chinese automakers make this year in western markets. Chinese automakers are now farther away from entering the U.S. or Europe than they were just one year ago.
Yang Jian
Yang Jian

Chery Automobile Co., China's largest self brand auto manufacturer, once had the best chance to enter the U.S. market. In 2007, Chery signed an agreement with Chrysler to produce a low-cost vehicle for Chrysler in North America.

But with Chrysler struggling on the verge of bankruptcy and Chery in deep financial trouble, the chances of those companies executing the deal are extremely slim.

Zhang Lin, who led the Chinese company's team in the negotiations with Chrysler last year, left Chery earlier this year. Before returning to China to join Chery in 2003, Mr. Zhang was an executive with Chrysler in America and his departure was widely seen as sealing the death of the Chery-Chrysler deal.

A year ago, Li Shufu, president of China's second largest own brand automaker, Geely Automobile Holdings Co., was fond of talking about his plans to enter the U.S. But at an auto industry conference in Shanghai last month, Mr. Li shunned the topic.

Moreover, he has shelved plans to build a joint venture plant in Mexico. The plan was killed by the downturn in the North American market and problems in getting approval from the Mexican government, Mr. Li said.

Meanwhile, Brilliance's sales in Europe have thinned to a trickle due to worries about the crashworthiness of Brilliance cars.

BYD Auto, another Chinese automaker mulling expansion plans in the U.S., received a boost in September. Wealthy U.S. investor Warren Buffett took a stake in BYD with hopes the automaker will start producing practical plug-in hybrids.

But BYD still has a long way to go. Its cars still have to pass the stringent safety and emission standards of the U.S. market. It also lacks a dealership network in America.

Chinese auto manufacturers have suffered a series of setbacks in their efforts to enter western markets and the global economic recession has made headway even more difficult.

The solution? It is time for Chinese automakers to build a strong base in the domestic market. If they cannot win in the market they are most familiar with, they won't stand a chance in foreign markets.

Yang Jian is the Beijing-based managing editor of Automotive News China, which is published by the Automotive News Group of Crain Communications Inc. Crain is also the parent company of the Ad Age Group.

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