As Detroit falters, Asian makers pick up speed

In fact, Geely is one of several Chinese automakers planning to sell vehicles in the United States. Most notably, industry maverick Malcolm Bricklin, who brought Yugos and Subarus to the United States, has said he plans to sell 250,000 cars made by Chinese manufacturer Chery Automobile in the United States beginning in 2007. The competitive pricing of Chinese cars could prove hard for some American consumers to resist, says Lienert at Edmunds.com.

“The big question for U.S. manufacturers is what will happen when China starts selling cars over here,” he said. “China just surpassed Germany as the world’s No. 3 automaker, and if they are already building cars in those volumes, you’ll see them over here in the U.S. in the next 10 years. We’ll see some teething issues, but it took the Koreans 10 years to do what it took Japan 20 years to do over here, and people are anticipating China will learn [to sell cars in the U.S.] even more quickly. I think Chinese will prove right away that they are just as adaptable as the Japanese and Koreans.”

Rebecca Lindland, automotive analyst at consultancy Global Insight, is skeptical that Chinese carmakers are poised to take over the North American market any time soon.

China’s domestic vehicle market is still very far from saturation, she said, and the economy doesn’t support large amounts of car exports. And with carmakers like Mercedes and BMW managing U.S. sales of around 220,000 and 310,000, respectively, Bricklin’s sales target of 250,000 Chinese cars looks unrealistic, she added.

“Japanese and Korean brands are really the ones to watch,” Lindland said. “That’s not to say Chinese brands won’t come to the U.S., because they certainly will, and an argument could be made that they are waiting and learning with plans to do it better, stronger and faster. So they will come, it's question of when. But the logistics can’t be underestimated, and we don’t see it happening until, at minimum, if all the stars align, before 2011.”

Until then, established Asian carmakers will continue to chip away at U.S. global dominance, says Lienert.

Overseas car companies like Toyota and Nissan have built modern manufacturing facilities in Southern U.S. states like Texas and Alabama to avoid labor unions, keeping operating costs low, he notes, although Toyota has assembly lines in union-friendly California and Canada as well. Japanese makers also are adding new products, ramping up production and pushing into the Chinese car market, although Detroit’s Big Three are also growing rapidly in China.

“If you want to see the future of automobile manufacturing in the United States, don’t look at Ford or GM, look at companies like Nissan,” Lienert said. “The Northern manufacturing belt in Michigan can’t be sustained any more. These workers get better benefits than most professional jobs. All of that is going to change now.”

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