China’s Long March Toward U.S. Garages

The long-awaited entry of a Chinese-made car into the U.S. market seems to be stalling as a number of previously reported deals fall through. Business Week reports from the North American International Auto Show:

Other than Chery’s aborted deal to supply cars to Chrysler, Chinese automakers seem intent on taking the hardest road possible to extending their brand to North America.

GM, for example, is trying to offload its Saturn division and a 440-dealer network, and would, say industry sources, probably ask for very little or no money. A Chinese automaker could probably take it over, rebrand it (Brilliance-Saturn, for example), and sell GM’s Saturn product until the company could add Chinese-developed product to the showrooms. “That would be a very inexpensive and smart way for a company to enter the market right now,” says John Casesa, principal in Casesa Shapiro, which consults with auto companies and dealers and holds an interest in a Saturn dealership.

BYD’s Wang says he believes it’s better to build a network and operation from the bottom up. Brilliance is following the same path. “It is very important to our strategy to establish our own product and brand,” said Vice-President He Guohua of Brilliance Auto.

Read a slightly more enthusiastic report on China’s plans from last year’s auto show, via CDT.

Meanwhile, back at home, the State Council has announced plans to boost the . From the Financial Times:

China yesterday cut sales tax on small cars and vowed curbs on steel output in a bid to jumpstart a recovery in the crucial car and steel industries to bolster flagging Chinese economic growth and employment.

Measures to support these two pillars of the Chinese economy were widely expected after Beijing said it would target them in its campaign to sustain growth of 8 per cent this year in spite of the global economic crisis. Beijing’s previously announced Rmb4,000bn ($585bn) stimulus package will begin taking effect only later this year and has so far done nothing to avert a dramatic slowdown in Chinese car industry growth.


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