Sorry, We’ll be a Bit Late to the Party: Chinese Automakers Push Back North American Dates
After Geely’s debut at the Detroit Auto Show last year and Nanjing Automobile’s purchase of the MG name and equipment, China seemed poised to make a leap into the already crowded Western automotive market. Initial trials have sent them back to the drawing board for further revisions however, and most manufacturers have moved their first North American distributions back at least two years.
Cars are unlike other commodity goods that consumers buy. A vehicle is often the second most expensive purchase an adult makes (after a home), and there’s a lot more careful thought and raw emotion that goes into it –the kind of soul-searching that isn’t normally applied to a DVD player. Cars are expected to remain in the hands of the purchaser for at least three years for lessees and more for outright buyers. Since it’s a large, long-term purchase, buyers will spend weeks or months cross-shopping, test-driving, and reading reviews online.
At the low price points that Geely, Chery, and other manufacturers are targeting, the buyers are normally students or young families: buyers who demand longevity, safety, and reliability. In some ways they are even more careful than those who can spend more: at higher price points, image becomes a factor; it can distract buyers from even a sub-par automobile. For those looking only for basic transportation, however, it is a cold comparison of statistics.
So far, Chinese automakers haven’t been able to provide incentive to compete with the rapidly-improving Koreans. The Landwind, a Chinese SUV tested by a German automobile club, received the worst crash-test rating in the club’s history. Not to say that the Koreans didn’t start here: The Excels and Sonatas of the late 1980s were even further behind the competition than the offerings by Geely are today. This is due in part to cheaper, more accessible technology, but largely due to joint ventures with Ford and GM. Chinese automakers have wisely sponged a great deal of know-how from their Western counterparts and could quite easily turn around and make them sorry; this has already happened in electronics manufacturing and software development outsourcing. One thing is clear, however: Current manufacturers for the North American market still have time to prepare for the onslaught. Chinese automakers are still in their teething phase.