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Chinese Car Companies May Have A Tough Time Coming To The US

Industry News / 5 Comments

They are already fighting to stay relevant on their home turf.

Aside from a few interesting copycat cars, news about Chinese cars rarely reaches the United States. We only hear about Chinese automakers when they buy up a company we've heard of or make the bold proclamation that they'd like to compete in the US market. Chinese automakers have been mulling over an entry into the US market as early as 2020 but according to an analysis conducted by Autolist, this goal may be harder than ever to achieve because of the current trade climate.

Chinese automaker GAC is seeking to be one of the first to arrive in the US, as is Geely's Lynk & Co. brand, although both companies may require a name change in order to successfully sell cars here. GAC was the only Chinese brand to show off cars at the Detroit Auto Show, but selling cars here will require more than just a strong product.

According to Automotive News, the Chinese automotive sector is facing big changes. "In the coming five years, China's auto sector will be fully open," Li Shufu, chairman of Zhejiang Geely Holding Group, said. "This is a very big challenge. Various barriers and thresholds will vanish. Changes in the Chinese automotive industry will influence the global industry" he added.

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Geely seems to be on the biggest offensive, purchasing Volvo and Lotus, investing in a flying car startup called Terrafugia, and creating the global Lynk & Co. brand. Even with all of these moves, Americans may be hesitant to buy from a Chinese brand.

According to a poll by Autolist.com, more than one-third of Americans would not consider buying a Chinese car. "Chinese brands have long coveted the lucrative US, and several have made promises in the past only to have their plans evaporate due to low brand awareness, poor build quality and failure to meet US safety standards," Autolist said. "Their best chance for grabbing consumers' attention and sales will be to compete on price."

Competing on price is something Chinese companies could potentially do, although this had been made far more difficult with the recent tariffs on vehicles being imported into the US from China. Chinese companies have even been struggling on their home turf now that the market is opening up to foreign investment. We may still see Chinese automakers arriving in the US but it seems unlikely that they will do so before the end of the decade.