BEIJING Jan 11 The Detroit auto show, due to
kick off on Monday, has proven since the mid-2000s more a
revolving door for China's indigenous automakers with ambitions
to sell cars in the United States.
For China's Zhejiang Geely Holding Group Co,
which exhibited cars in 2006 at the North American International
Auto Show in Detroit, and for others like battery and car
producer BYD Co that followed suit, selling cars to
American private consumers has proven a pipe dream.
This year, as Geely and BYD and others stay away from
Detroit, it is Guangzhou Automobile Group Co or GAC
Motor's turn. GAC Motor is one of China's several state-owned
automotive enterprises and runs manufacturing and sales joint
ventures with Toyota Motor Corp, Honda Motor Co
and Fiat SpA.
It is the first time for the company, based in the Southern
China industrial city of Guangzhou, to take part in the Detroit
GAC Motor will exhibit several "newly developed" cars,
including three green vehicles: a four-wheel-drive hybrid sedan
called Trumpchi which is ready for mass production; an electric
SUV "prototype" dubbed Trumpchi GS5; and range-extended electric
hybrid E-jet, a concept car, according to the company.
"These masterpieces are all energy-saving and new energy
vehicles," GAC Motor said on its website. They represent "the
company's consistent philosophy of 'Making Fine Cars' and
'Detailing-Greatness,' as well as its favorable attitude toward
vehicle electrifications, which make GAC Group differ from the
previous Chinese exhibitors."
GAC Motor executives did not respond to questions by Reuters
on whether the company harbors ambitions to sell cars in
advanced markets such as the United States and Canada, but some
indigenous Chinese automakers are getting close, some experts
and industry insiders said.
At the least, they believe those Chinese automakers are
closing the quality gap rapidly enough that they might in five
years or so become theoretically ready to start thinking about
selling cars in the U.S. and other mature auto markets.
One such analyst is Jacob George of consulting firm J.D.
Power and Associates.
J.D. Power's analysis, according to George, shows that the
"initial" quality of cars engineered and built by China's
indigenous automakers is likely to be on par with levels
achieved by their U.S., European, South Korean and Japanese
peers by 2018. Initial quality refers to the quality of new
vehicles that carmakers are able to achieve and is measured by
J.D. Power by surveying a large sample of new cars buyers in key
markets around the world.
That means, George said, Chinese automakers should be able
to start thinking seriously about selling cars in the West
toward the end of this decade.
But only theoretically, warned the J.D. Power analyst.
That's because an automaker needs more than just appropriate
initial vehicle quality to be able to sell cars in a mature
market like the U.S., he said.
"By 2018, we do see Chinese automakers becoming roughly
equal in quality to global automakers, but in terms of actually
selling the vehicle and in terms of actually appealing to the
masses, you need to have more than just quality," George said.
They would need to develop consumer trust for the car and
its brand and also make sure the car doesn't break down in the
longer term, he said, referring to the longer-term product
reliability and durability.
Realistically, those Chinese automakers like GAC Motor would
not likely be ready to sell cars in the U.S. or other advanced
markets until in the early 2020s, the Shanghai-based consultant
Still, many Chinese automakers are becoming more capable of
producing decent cars, having become good enough to be able to
sell about one million low-cost no-frills cars annually outside
China -- mostly in emerging economies, from Egypt to Indonesia
In China, all cars built by domestic Chinese automakers,
whose initial quality is measured by J.D. Power, are below
industry average, according to the company. But companies such
as Geely and BYD are closing the gap rapidly and are almost near
industry average, George said.
It was not immediately clear how close GAC Motor cars are to
industry average in China.