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Do you remember the Yugo? That tiny, flimsy car produced by a communist nation and introduced to the buying public in the 1980s as a sensible, affordable approach to transportation? Some recall that the Yugo was a little less than popular. Still, there were buyers.. and as a result a generation of Yugo's still sit in garages, junkyards, and other final resting places across the nation.
Auto entrepreneur Malcolm Bricklin and the investment banking firm Allen & Co. initially signed the first-ever deal to import cars made in China for sale in the United States. Bricklin, known best for bringing the ultra-cheap Yugo car to the U.S. market in the 1980s, put this deal together back in 2005, with plans to launch in 2007. Unfortunately for Bricklin, this deal fell through, and a new partnership emerged.
What sets this deal apart is the import partnership between the Chinese automaker and the Chrysler Group, finally signed in July of this year. The partnership gives the Chery Automobile Co., based in the eastern Chinese city of Wuhu, the distribution structure already in place with the Chrysler line... and an opportunity to realize its longtime ambition of entering the U.S. market. The Chinese automakers already export mostly low-priced trucks and buses to Africa and other developing markets. But analysts say they lack the technology to meet U.S. and European safety and pollution standards on their own.
This partnership will do more than assist with distribution; it will also lend credibility to the brand, as well as hopefully instill a layer of quality control that is lacking in many other communist imports. But will it be enough to instill confidence in the American public? Will the brand uphold the quality standards of the Chrysler group, or is this move just the final dying gasp of an automobile giant? That remains to be seen. But rest assured I will not be headed to my local Chery dealership anytime soon. I remember the Yugo.
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