Forbes asks the Hard Questions: Why Haven’t Chinese Cars Come to the USA?

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The simple answer being of course, Federal Crash Standards. In a seemingly eternal battle of cat and mouse, as soon as Chinese manufacturers meet Euro 5 emissions or build a car that has NCAP 4 stars or better, a new range of standards and guidelines appear that take it to the next level for their already stretched R&D budget.

Forbes.com’s Jean Halliday:

 

Chinese automakers have been eyeing the U.S. market for years, yet not one has started selling cars here. They just aren’t ready for prime time in one of the world’s most competitive auto markets.

The latest Chinese company to test the waters is Guangzhou Automobile Group Ltd., or GAC, which brought a trio of its models to the North American International Auto Show in Detroit. Granted the car company’s display was in the lobby, not on the main floor. But GAC’s Dr. Xiangdong Huang, group VP and president of engineering, quipped that the location probably had better visibility than the show floor due to all the heavy foot traffic.

The most impressive car unveiled by China‘s sixth biggest carmaker was a sporty, concept sedan called the E-Jet, an extended range hybrid that is expected to go into production later this year.

The fatal part:

That’s why so many Chinese car companies have partnered with outsiders.  GAC has joint ventures with non-Chinese car companies to produce cars there, including Japan’s Toyota, Honda and Italy’s Fiat. GAC started producing the Fiat Viaggio model last fall in China. GAC also sells the imported Fiat Bravo, 500 and Freemont in China.

Foreign manufacturers partnered with local Chinese companies: Because they had to. The deal was known as Market Access for Technology, in that foreign manufacturers were allowed to make and sell cars in China on comprimise that they hand over some technology to their Chinese partners. This deal didn’t really work out in the Chinese partners favor, but they did grow big from selling foreign branded cars.

Chrysler Group’s Mike Manley was part of GAC’s press conference, but not for long. The COO for Fiat in the Asia Pacific and CEO of the Jeep brand slipped away as soon as the short presentation was over. Perhaps he didn’t want to steal his partners’ thunder or maybe he had a pressing appointment somewhere else at the show. But it sure seemed Manley fled as soon as he was able, as if he didn’t want to be there.

I’ve met Mr. Manley before, he probably slipped away for a cigarette.

About the author  ⁄ FrankF

Frank entered the automotive industry via his father's instructions. He grew up with cars around him, especially as his father was a major auto restorer, Frank's childhood was spent passing beers, tools and coffee to his father whilst he explained the ins and outs of engines. Frank now works in the Chinese car industry at a specific manufacturer.

11 Comments

  • dragin
    January 21, 2013

    Does anyone think that the Yugo, the Stirling, or the Daewoo would have a chance of getting past the highly rigorous safety and emissions standards of today?
    Not a snowball’s chance in hell…
    But market forces are at work as I write this, and so despite the numerous wreckages of hopeful attempts we’ve seen along the way, that inevitable entry is drawing close.

  • santos palisander
    January 22, 2013

    The regulations, with the exception of fuel mileage, are beginning to stabilize to the point where the Chinese now have a clearer target to aim for. I have been predicting a Chinese entry by the calendar year 2015, and I am still holding to that date. In the end, US – China relations may have more to do with the entry date than the technological
    hurdles involved.

  • I __ H a t e __ C h i n a
    January 24, 2013

    @ Dragin

    There is one 3rd world automaker likely to make it to the US market, Tata. This is because Tata is a vast conglomerate able to redirect tens of billions into the chairman’s pet project like Hyundai before it, and the US entry is of Tata Chairman’s highest priority, so Tata will likely make it to the US because it has both the engineering and financial resources.
    Likewise, the only Chinese automakers that could make it to the US are the likes of SAIC and FAW, but these companies are happy with the money they make in China and are not interested in going overseas where they would initially lose billions and may not see a profit for a decade.

  • BYD the best bet
    January 24, 2013

    It just shows how PROTECTIONIST USA is?
    One expecting FAIR COMPETITION in USA will be disappointed.
    Apart from facing unusually tough regulation, the importers have to overcome the PREJUDICE of the MEDIAS.

  • I __ H a t e __ C h i n a
    January 24, 2013

    @ BYD the best bet

    Germans, Japanese, and Koreans do not share your feelings as they have no problem selling their cars in the US. As for the media prejudices, it is up to individual automakers to overcome them.

  • Taylor
    January 24, 2013

    Hyundai – The car company that lies about their fuel efficiency numbers.

  • dragin
    January 24, 2013

    Speaking of media bias against Asian makers, save some of the mud to sling at Ford for its “fuel efficiency numbers”….the media chose to give it a pass.
    What’s good for the goose is good for the gander.

  • Brewster
    January 25, 2013

    As other posters have suggested MOST CHINESE VEHICLES will not pass USA NCAPS or even EUROPEAN NCAPS. The MIIT,[Ministry of INDUSTRY,INFORMATION,TECHNOLOGY is addressing the problems because they don’t want Chinese vehicles to have the implied version of being ‘cheap’ cars no more. They are sensitive to the fact that Korea can build higher quality vehicles then China. So I applaud the PRC for finally stepping up and limiting the amount of vehicles that are not up to standards. The Chinese NCAPS ARE A WATERED DOWN VERSION OF THE EUROPEAN NCAPS. But with 126 vehicle manufacturers inside CHINA RIGHT NOW the PRC needs to find some way to limit the vehicles that will not meet the standards for its buying public. The standards both in CHINA AND ABROAD should be the same as your products are only as good as their reputation.

  • Brewster
    January 25, 2013

    FORD GETS AWAY WITH ITS UP TO MILEAGE NUMBERS BECAUSE SOME AREAS OF THE COUNTRY IN WHICH IT IS SOLD USE ETHANOL AND SOME AREAS DO NOT USE ETHANOL. THE EPA TESTS ARE DONE WITH 100 PERCENT GASOLINE ONLY not ethanol

  • I __ H a t e __ C h i n a
    January 25, 2013

    @ Brewser,

    Chinese brands are first to go bankrupt if the Chinese safety and emissions standard is strengthened to the EU standard. This is because EuroNCAP/Euro5 compliant cars cost 30% more to build than what Chinese brands sell right now, so consumers will choose foreign brand cars over chinese brand cars if the cost of building cars went up in China.

  • rayco
    January 29, 2013

    The US has already hit Peak Car. The US market for new cars is now on the decline. The only value for a Chinese auto manufacture go after the US market is part of a world marketplace strategy, like Honda, Hyundai, Nissan, and Toyota before them. They all entered the US with labels of cheap and badly made before too long their business took off. Now they all in the top 8 car brands in the world.

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