China is coming and why Detroit should be worried
If turnabout is fair play, the Motor City players pouring billions into the booming Chinese market should get set for metal from the Middle Kingdom. In an auto show press event more akin to diplomatic ceremony than industry unveiling, more a geopolitical statement than one of business strategy, China's Changfeng Group took the wraps off a few not-so-special SUVs Monday and issued a clear statement -- it wants to enter the U.S. market, preferably with an American partner.
Yes, be it a $25,000 Liebao CS6 SUV or a Feibao CT5 pickup from Changfeng, a $10,000 sedan from Geely or a tiny car from Chrysler made by Chery, the Chinese are coming.
"We are actively looking for collaboration opportunities with the major auto companies and suppliers in the world," Changfeng Chairman Li Jianxin said. "Many of them are right here in Detroit. Changfeng's participation in this auto show symbolizes the initiation of our internationalization campaign. Through the collaboration with local dealers, we will jointly promote Changfeng's products in the North American and global market."
And scare the wits out of the United Auto Workers, suppliers and automakers from Detroit to Stuttgart and Toyota City. Not because comparatively tiny Changfeng (with global production capacity of 200,000 vehicles, less than one typical auto plant today) and Geely, which made its unofficial debut last year at the North American International Auto Show, are towering competitive threats.
Because, by themselves, these Chinese government-controlled entities aren't -- at least not in the next decade or so.
The challenge they pose is a new low-cost standard they could set, provided their cars, SUVs and pickups meet the quality expectations of American consumers awash in world-class choices -- from Detroit, Japan, South Korea, Germany, Sweden, the United Kingdom.
The Chinese also need to field innovative designs that don't evoke a Nissan X-Terra SUV, circa 1999. They need to establish or, preferably, join, an established dealer distribution network. They need help negotiating the tricky bureaucratic maze of certifying cars and trucks for sale in the United States.
None of which is impossible in a global economy. More at Detroit News