October 06, 2006

Ready for the Chinese Cars?

Almost a half century after the first Japanese cars entered the US auto market (the 1957 Toyota Toyopet), American car makers are in a frantic scramble to prepare for Chinese car exports beginning as early as next year. At Ford, the Ford family stepped down to allow new leadership to restructure (layoff thousands) and prepare for the competition. Meanwhile General Motors though not for sale (it's a bargain at around $10 billion) is desperately seeking a merger with either Renault or Nissan. But the Germans may trump them all with a new joint venture with Chinese carmaker Chery (which is already scheduled to start delivering cars next year under its own brand and dealership network). Under the agreement, whose details are under wraps, Chery would produce subcompacts for sale under the Chrysler brand in the United States.

Of course, the real story here may be what's happening at Malcom Bricklin's (he of Subaru and Yugo fame) Visionary Vehicles which was to start importing Chery cars directly into the USA with its own network of dealerships. Seems now Bricklin is delaying his launch until end 2008 or later.

And don't forget Geely which was to start selling cars in America as soon as next year. Geely says now it may actaully build car plants in the USA, thereby jumping ahead to Toyota and Hyundai status.

Lastly, Nanjing Automobile plans to start producing MGs (they recently bought the British company and brand) as soon as next year and are planning to reopen an old GM plant in Oklahoma as well.

Is that most American of all industries, the automobile business, ready for the Chinese invasion?

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