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First Chinese import coming to the US: Will the Chery be a lemon?

No

by Vince Capece

When the first Chinese car or truck arrives in the US, it'll be adequate. Americans want to hear that China will dump awful vehicles on these shores and that the American consumers will turn their noses up at how awful these vehicles will be, but that just won't be the case.




The first US-legal Chinese vehicles won't be competing with Lexus at the top of quality surveys either. As a matter of fact, they will most likely fall near the bottom of every quality survey ranking down with such lowly brands as Mini and Land Rover. Yes, these two prestigious brands are among the lowest in quality measured in the first few months of ownership, but for some reason few people call them "lemons."




Currently, there are about five or six Chinese manufacturers vying for the honor of being the first to crack the US market. Among the leaders are Chery, BYD, Great Wall, Brilliance, and Geely. They're all small compared to the big boys in the Chinese market who make vehicles designed by Volkswagen and General Motors and Peugeot. And it's because of those alliances that the large players probably won't be among the first wave in the US market.




If you study the history of the US automotive marketplace, every time a new country enters the US market they've been labeled as "less than adequate." Initially it was Germany's Volkswagen in 1949 selling tiny, underpowered cars against two and three ton chromed behemoths; in the late 1960s, the "Beetle" was still on the market and among the top selling nameplates in the US. The Japanese followed in the late 1950s and by the early 1980s they, too, were vying for the top places among cars sold in the US. Korean automakers followed in the 1980s and 1990s and today Hyundai sells over half a million cars and trucks in the US.




The participants in each of these waves learned from the prior ones. Japan introduced cars larger and more mainstream than the Volkswagen. Korean learned from Japan's early quality mistakes and launched entry-level vehicles with great success. And China will learn from Hyundai's early problems to further improve their chances.




By assuming that Chery, or any other Chinese car maker, will foist lemons on the US market is missing the point. With history as a guide, the Chinese will make inroads and will become honest competition within 10 years. Toyota built its first car in the 1930s and became a force in the US by the 1980s; Hyundai introduced its first Korean-developed car in the early 1970s and by the late 1990s were quite competitive; there's no reason why the Chinese couldn't follow this pattern.




Chery, among others, is using the global automotive supply chain to create its own vehicles. Harnessing the power of designers from Italy and engineers from Europe and Australia, the company is already utilizing the best that the world's largest players have at their fingertips. These sources already know the needs for the automotive marketplace in Europe and North America, which helps companies like Chery hit the ground running.




Sure, they're not going to burn up the quality reports. They're going to have their problems at the start., but these aren't going to be Yugos. They're going to be better than Toyota's first cars when they met with the American market. Underestimating the competition worked to Volkswagen's advantage 40 years ago and Toyota's advantage 30 years ago and will work to the advantage of the Chinese automakers and to the disadvantage of everyone else.

Helium, Inc.
200 Brickstone Square Andover, MA 01810 USA