Chinese gearing up for U.S. car market

Chinese companies are racing to enter the U.S. auto market.

One manufacturer previewed this week at the North American International Auto Show, and another plans to hit dealerships by the end of next year.

“For sure, nobody needs another manufacturer, if all we were going to do was manufacture another car. But we are going to make a dramatic change in the price [structure] of higher-priced cars,” said Malcolm Bricklin, the 66-year-old chief executive of Visionary Vehicles, a New York City company that has long-term plans to sell 1 million cars a year built by China’s Chery Automobile Co. in the U.S.

Mr. Bricklin plans to introduce midlevel cars, competitive with Japanese and Korean sedans and crossovers, to the U.S. by the end of 2007, he said yesterday from his New York office. Cherys, which will be sold under a yet-to-be-determined name, will be priced about 30 percent less than competitors.

Geely Automobile, one of Chery’s competitors in China, is aiming at the market’s budget end. The company previewed a prototype four-door sedan in Detroit this week — the first showing by a Chinese company at the annual industry event — and plans to start selling in the U.S. in 2008.

“Geely will bring to the people of the United States a safe, high-quality, family-friendly automobile that can be purchased for less than $10,000,” Shufu Li, Geely’s chairman, said Monday in Detroit.

The small car, called the 7151CK, is a mainstay of the Geely line in China but is not high-enough quality for the U.S. Independent reviews of Geely models have complained of cheap interiors and rickety transmissions.

“There will have been many improvements over the design and engineering that you see here,” Mr. Li said.

The Chinese cars would have to meet U.S. safety and emissions standards, as well as consumer expectations.

J.D. Power and Associates said in December that there is a significant quality gap between Chinese and international brands.

“The success of Chinese domestic brands in global markets largely depends on how fast they catch up to multinational [manufacturers] in the area of quality, reliability and durability,” said John Humphrey, senior vice president and managing director of J.D. Power Asia-Pacific-China operations.

A line of cars by Geely, based in Hangzhou, China, debuted internationally last year at Europe’s premier car show in Frankfurt.

“They were pretty sorry specimens,” said George Peterson, president of AutoPacific, an industry research firm in Southern California. “But once the Chinese start coming in, they will start chewing away, especially Geely, at the lower end of the lineup.”

Chery has not shown at U.S. or European auto shows, but Mr. Peterson said he had been impressed with the company.

“Chery is the real deal,” he said of the government-owned company based in Wuhu, China.

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