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China in no hurry to enter North American auto market

Ever wonder why your jeans, computer, and hockey stick are made in China, but not your car?

Ever wonder why your jeans, computer, and hockey stick are made in China, but not your car?


If you’re thinking the answer is, “just wait,” you might be right. But the wait will definitely longer than most anticipate.


For one thing, China’s automakers took a collective deep breath about a year ago and decided to concentrate on domestic production and sales. Which makes sense really. Why battle in mature North American and European markets, bursting with famous and overachieving brand names, when your models have zero brand recognition there?


A Chang’an Alsvin anyone?


And why go to a party across town, when the one happening in your own 'hood is the biggest and baddest one on the planet? Two years ago, China surpassed the U.S. as the world’s largest single-country market. More than 18 million cars and light-duty trucks were sold in China in 2010, compared to about 11.6 million in the U.S. A recent report suggests Chinese annual domestic sales will approach 40 million by 2020.


They already make more vehicles than anybody — about 16 million a year — and are poised to make much more in the near future, but they’ll need pretty much all of it to satiate domestic demand.


According to auto analyst Michael Pistol of TJAA Analytics, the only Chinese-built vehicles we’re likely to see in North America and Europe with be those branded as Ford, VW, GM, etc., or possibly under a new “sub brand” developed and sold by those automakers. These vehicles would be built by Chinese operations under contract, or by plants in China owned and operated by American, European, Japanese and Korean automakers, joint and otherwise.


“The Chinese automakers have no intention whatsoever of coming into our market under their own brand names,” noted Pistol.


But at least one Chinese automaker, BYD, has gone on record that it will sell vehicles in the U.S under its own label. BYD, which stands for “Bring Your Dreams,” is famous for having one very influential investor — Warren Buffet.


The BYD F3 is currently the top-selling vehicle in China. But the first BYD vehicle to hit these shores is slated to be the all-electric BYD e6, shown at three consecutive Detroit auto shows. As it stands, the e6 is supposed to be introduced to U.S. fleet operators in late 2011, and to the retail sector in the first quarter of 2012. But this marks about the third delay in its planned rollout, so don’t hold your breath.

 
 
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