China’s Geely makes its mark in Detroit

Roland Jones Business news editor • Profile • E-mail

DETROIT - It’s one of the most viewed displays at this year’s North American International Auto Show, but it’s not one of the huge spectacles of glitz and glamour put on by the Big Three U.S. automakers.

Instead, China’s Geely Automobile Company has a rather ordinary display featuring a small silver sedan outside the main show room of Detroit’s cavernous Cobo Center. But its presence in Detroit is by no means unimportant.

“This is the first Chinese automobile to participate in the Detroit Auto Show, so we’re unique,” said John Harmer, vice president and COO of Geely-USA. “As auto shows go, this year isn’t dramatically different from last year — the most significant change is that Geely is here.”

Until recently, Chinese vehicle exports were limited to buses and trucks. But now China’s manufacturers have been busy upgrading their technology and production to compete overseas and they are ready to do business in the massive U.S. automobile market with low-priced vehicles aimed at U.S. consumers.

That might be good news for cost-conscious Americans, but analysts say it could be bad news for Detroit’s Big Three, now struggling with sagging U.S. sales and busy laying off workers and closing down factories to cut costs.

Jim Seida / MSNBC.com Journalists crowd the small Geely exhibit at Cobo Center in Detroit. The exhibit was at the entrance to the auto show rather than on the main floor with most other exhibitors.

Shufu Li, chairman of Geely, announced here that Geely is on track to enter the U.S. market in the summer or fall of 2008. But executives at established auto makers say they aren’t too concerned about the threat of competition from Chinese brands any time soon, citing quality and other factors.

The silver “CK” sedan on show here in Detroit is about the size of a Honda Civic and a forerunner of the vehicle that will eventually go on sale in the United States. It gets 25 miles per gallon in the city and 35 miles on the highway, and Geely says it will be very competitively priced when it goes on sale — below the $10,000 level.

Pricing is an important advantage for Chinese carmakers like Geely. They plan to offer low-priced cars for American consumers and undercut their American and Asian rivals.

And Geely is just one of several Chinese automakers planning to sell vehicles in the United States.

Malcolm Bricklin, who famously brought low-cost Yugos to the United States in the 1980s, pushed back his date for importing cars made by Chinese manufacturer Chery Automobile from the start of 2007 to the end of that year. The cars are expected to cost around $20,000 and compete with luxury names like BMW and Mercedes.

“Now the dealers are involved, and they’re going to tell us the things they want in the cars. The time line will change only from the input of the people we say we want input from, which is the dealers,” said Bricklin, founder and president of importer Visionary Vehicles, on the sidelines of the Detroit Auto Show this week.

“Now it’s pretty much around the end of 2007,” he said.

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