Chinese automakers see U.S. as a challenge

Another Chinese automaker at the show is Li Shi Guang Ming Auto Design Co., which is displaying a collection of tiny, bubble-shaped cars that look better prepared to carry golfers on fairways rather than travel U.S. roads.

China's Chery Automobile Co. doesn't have a display at the show but has plans with Chrysler LLC to jointly produce and export small cars to the U.S. and Western Europe. Global Insight's forecasts call for those cars, sold under Chrysler's Dodge brand, to be the first from China on U.S. roads, likely in 2010.

But China America Cooperative Automotive Inc., an importer that is showing a pickup and SUV made by a Chinese company, hopes to be selling the vehicles in about a year, followed by a crossover and sedan. Chamco is signing up mostly existing dealers across the U.S. to sell the vehicles.

"These are ... durable, quality cars," William Pollack, Chamco's chairman and chief executive, said in an interview Sunday, the first day of media previews at the auto show. "I think the consumers will embrace the cars."

Pollack said his company — and the Chinese — recognize the importance of getting it right when selling to U.S. drivers. Chamco has focused on making sure quality is high and prices are low, an estimated 20 percent less than comparable models. Styling, he noted, follows that of established automakers.

Jack Nerad, executive market analyst for Kelley Blue Book in Irvine, Calif., said Japanese and South Korean companies faced similar quality concerns in their earlier days in the U.S. as those now facing Chinese automakers. Key, he said, will be how well those first cars stack up against current models in the U.S. market.

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"It's an obstacle, but certainly not an insurmountable one. There certainly will be some skepticism about Chinese-built cars," Nerad said. "They have to hit the ground with high quality. Stumbles early with product quality can be devastating."

South Korea's Hyundai Motor Co., for example, faced driver dissatisfaction with some of its first vehicles in the U.S. But a focus on quality and styling improvements, along with the introduction of the industry's first 10-year, 100,000-mile limited powertrain warranty, helped ease consumers' worries.

Lindland said it's naive to think that Chinese carmakers won't find successes in the wake of Japanese and South Korean automakers. But she noted the fate of the cheap and much-maligned Yugo, which was exported from Serbia to the U.S in the late 1980s before being pulled from the market in the early 1990s.

"Yugo came and didn't succeed," Lindland said. "Just coming to the U.S. does not mean success."

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