CHINESE CARS—HERE  NEXT YEAR, OR AFTER 2012?

CHAMCO vehicle

February 11, 2008—The question everyone wants answered about Chinese cars is “When?” said J.D. Power Asia analyst Tim Dunne at a convention workshop on Chinese vehicles in the U.S. market. He admitted no one knows for sure. Two ventures—Chery and Changfeng—‚have already been delayed. CHAMCO (China America Cooperative Automotive Inc.), which has a booth at the convention, promises it will be here in 2009. But Global Insight analyst George Magliano says no Chinese cars will be sold here until after 2012. The biggest stumbling blocks? Vehicle quality and U.S. safety and emissions requirements.

There are more than 50 Chinese automakers, half of them joint ventures. Most are less than 10 years old. Possible scenarios for the U.S. market include partnering with a distributor, as CHAMCO is doing with ZX Auto, or with an existing manufacturer, like Chery is doing with Chrysler.

CHAMCO’s booth displayed a pickup and a sport-utility, each seating five passengers and sporting a 2.7-liter engine. A crossover and sedan are coming a year later, chairman Bill Pollack said at a press conference. Texas Ford dealer Bob Tomes, who was examining the vehicles, has been following the company for two years. “I don’t think they’ll be here as soon as they say, but probably in the next two to four years.” Noting that CHAMCO has raised the dealer investment from $200,000 to $350,000, including parts and signage, he said, “We’re going to do our due diligence.”

CHAMCO plans to launch the first products with 150 dealers; 78 have made commitments to date, said Pollack. Initially, no separate dealership facility will be required. “We’re working hard to limit dealers’ investment,” Pollack said. Besides, he likes dualing because he thinks CHAMCO vehicles will look like a bargain next to, say, comparably equipped but more expensive Toyotas that will be much more expensive. CHAMCO vehicles will be priced in the “low to mid-teens,” about 20 percent below similar models. Dealer margin will be $1,650 per car.