That was probably a mild preview of what is coming.
Bright and enterprising individuals wanting to participate in auto marketing should be trying to line up distributorships. Imagine if you'd have gotten the Toyota or Honda rights to a big geographic area in 1970......
Chinese prepare for US car market invasion
Jan 15, 2008
DETROIT, Michigan (AFP) — Chinese automakers are actively preparing for entry into the US car market, the biggest in the world, in a move that has not gone unnoticed by American and Japanese rivals.
With a record presence at the North American International Auto Show in Detroit, Michigan this year, China has made a splash with four manufacturers -- Geely, BYD, Changfeng, Li Shi Guangming -- and a distributor, Chamco.
Admittedly, the Chinese debutantes have only modest visibility, with three of them sharing space for their prototypes and equipment in the basement, while two others are located in the entry area of the exhibit hall.
Nevertheless, news conferences by Changfeng, BYD and Geely have drawn packed crowds, even as no straight answer has been given to burning queries: when will Chinese cars debut in the United States? which kinds? how many?
Chamco aims to become by the end of 2008 the premier importer of made-in-China cars to the United States, Mexico and Canada.
A spokesman for Geely, the largest private manufacturer of Chinese cars, said the nuts and bolts of its US market entry are under wraps because "at this stage it's very strategic, so we don't go into these details."
Changfeng aims for its splash between now and 2009.
"It's important for us to develop quickly, but in the US, we take our time," a Changfeng spokesman said.
Henry Li, a BYD company official, said its aim is to first "learn from the US manufacturers ... try to get some market feedback ... talk to a lot of people, dealers, analysts, distributors."
When it comes to vehicles, the Chinese are focusing on clean technology, despite detractors who criticize economy models on the basis that they don't fit in with American tastes for top-of-the-line, big and fast luxury cars.
Changfeng is presenting fuel efficient 4x4s, BYD boasts clean technology with "classic" hybrids and hybrids with a 100 percent electric option, while Chamco dreams of importing 4x4s and pickup trucks.
The Chinese carmakers' ambitions are met by US market stalwarts with a touch of condescension, mingled with admiration.
Rick Wagoner, the CEO of General Motors, brushed aside the possibility of any imminent Chinese arrival on the US market, estimating that serious Chinese competition would not come until the next five to 10 years because the Chinese market is currently too fragmented, with more than 300 manufacturers.
"If they get 100 Chinese domestically owned manufacturers exporting, that is not going to work for anybody," Wagoner said.
In addition, the Chinese must be sure to fully comply with US safety and security standards, according to Wagoner, a point which Chamco insists it is in the process of assuring by obtaining certifications on its imports.
"The Chinese are very good at learning from the past so they will know that when the Japanese came in, it took a long time to repair from the (problems with) the initial entry," Wagoner said.
John Mendel, vice president of Honda North America, said a degree of mimicry is likely to be seen in the early Chinese models.
"They're very good in developing copies," Mendel said. "I think it's a quick way to get credibility, as they know the new entrants always suffer from a notoriety deficit."
Another important barrier to market entry is distribution networks, a point on which these outsider manufacturer have remained tight-lipped.
"Distribution is the key," said Tan Mingan, who heads an association for the promotion of Chinese businesses in Detroit.
"There are a multiplicity of Chinese automakers who are willing to compete in the US. The quality and security standards is just a step. But having a distribution partner, this is a crucial point in the strategy, and how you can succeed or not to enter the market."
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