AUTOSHOW-China's Geely sees US market entry no sooner than 2013

DETROIT Tue Jan 15, 2008 4:08pm EST

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DETROIT Jan 15 (Reuters) - The head of Geely Automobile Holdings Ltd. (0175.HK) said on Tuesday it would take the Chinese automaker at least five years to begin selling cars in the United States, stressing there was no room for missteps in entering one of the world's most competitive markets.

"(The timing) depends on changes in the auto industry, in Geely, and in the global economy," Chairman Li Shufu told Reuters in an interview at the North American International Auto Show.

"If nothing goes wrong, then maybe we will be ready in about five years."

Geely's timeline is conservative compared with those of other Chinese upstarts such as Changfeng Group and Zhongxing Automobile.

U.S. venture Chamco Auto said this week it wanted to begin distributing Zhongxing's cars in the United States some time this year, in what will likely be the first entry by Chinese-made cars.

But Li, whose company began building cars just 10 years ago in rural China, said Geely's edge would be its technologically advanced cars, while the company also needed more time to study the needs of the local market.

"Being cautious is essential for the very survival of our company," he said. "No failure is allowed. Long term, it will be good for the company."

Asked at a news conference on Monday when Geely would enter the United States, Li had said he was not sure yet whether his cars were welcome in the market.

Geely returned to the Detroit auto show for the third time this year, bringing its newest models, including the CK, FC and MK sedans. The Detroit show is a global automotive showcase.

Geely also produced a video on a stability system designed to keep vehicles from rolling over in the event of a tire blowout in a bid to demonstrate its focus on innovation.

Li said he expected to make money in the initial stage of selling in the United States despite the investments that would be needed to develop a sound sales and after-sales network.

Geely is also preparing to build a factory in Mexico. Li declined to disclose how much the group would invest on the project, but said the automotive side alone could cost roughly $500 million.

"It's a group action, so it will require a lot of money," he said.

Geely expects to have production capacity of 1.7 million vehicles by 2015 in China through nine factories. It now has two plants overseas and four more in the pipeline. (Reporting by Chang-Ran Kim, Editing by Peter Bohan)

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