A man works at a Geely assembly facility in Shanghai. Geely’s recent acquisition of Volvo has made it the most viable car manufacturer from China to enter the U.S. market. (Photo : Reuters)
Guangzhou Automobile Group (GAC) just added itself to a growing list of Chinese automakers with plans to sell cars in the U.S.
Wu Song, general manager of GAC's passenger vehicle unit, told the press at the Shanghai Auto Show the previous week that his "wish" is for the company to enter the United States market in 2017.
While promising, the fact is that neither GAC nor any other Chinese auto brand is ready to export cars to North America in the foreseeable future.
For starters, GAC has yet to start certifying products and recruiting dealers in the U.S., and that takes a lot longer that what Wu expects.
Like Wu, heads of other Chinese car manufacturers have expressed similar intentions in the past.
In 2008, Geely chairman Li Shufu told the press that he foresees the company to start selling cars in America's shores in half a decade. At the Beijing auto show that same year, Great Wall Motor Co. president Wang Fengying revealed a similar plan for their company.
But now that seven years have passed, neither company is selling cars in the United States. What held them back?
The first obstacle is vehicle crashworthiness. The U.S. and Canada have some of the world's toughest safety standards, and, while Geely and Great Wall have had several models attain safety ratings in Europe, not a single Chinese brand has been certified to sell light vehicles in the U.S. market.
Quality is another and probably the most pressing concern for Chinese car brands. Just take Great Wall as an example; last year the company stopped sales of its flagship SUV, the Haval H8, twice the previous year due to a faulty transmission.
Even if these companies do get their safety and quality up to speed, it will still be too early for them to enter the U.S. market. Instead, they should refocus their sights on China, the world's biggest auto market, and defend their home turf.
After years of sluggish market share, Chinese brands rebounded in 2014 with robust sales of locally made SUVs. But they only managed to pull this off after Geely, Great Wall and Chery abandoned weak brands and slimmed down their sprawling dealership networks.
In contrast to their foreign competitors, Chinese automakers are young. Many did not exist 20 years ago; GAC itself only began selling cars under its own brand just five years ago.
Chinese car manufacturers are certainly making progress. In recent years, they have managed to narrow the quality gap with their overseas counterparts, according to JD Power's annual surveys. But GAC still isn't the most viable candidate to compete in the United States.
After their acquisition of Volvo in 2010, Geely has jointly developed a compact car platform with the Swedish automaker. And this makes Geely the company to look out for.
In time, Geely or another Chinese brand will be able to put out products that can meet U.S. quality standards, but they will need time to certify them and establish a dealership network. And they have to do all of this while remaining vigilant in their home market.
So until then, don't expect Chinese cars to be sold on the other side of the Pacific any time soon.
