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China wants to enter the U.S. car market, but a rough road lies ahead

Russ Mitchell, Los Angeles Times on

Published in Automotive News

Volvo Cars and Volvo's Chinese owner, Geely, have joined forces to create a new line of automobiles, named Lynk & Co., designed in Sweden and manufactured in China. Lynk aims to export a compact SUV to Europe in 2019, while plans to distribute its cars through U.S. manufacturing plants outside China are under consideration.

Polestar, another Geely-Volvo endeavor, plans global distribution of high-end electric cars and could bypass the need for auto dealerships through online sales.

SF Motors, an arm of China's Chongqing Sokon Industry Group and headquartered in Santa Clara, is planning its own technology-loaded luxury car line for the global market. SF Motors' chief innovation officer is Tesla's original founder, Martin Eberhard.

Dozens of other small Chinese or China-funded companies want in, including Byton, headed by former BMW executives, which introduced an electric compact SUV concept car at CES in Las Vegas last month.

Threatening all these plans is a political buzz saw on trade policy. President Trump has made clear his distaste for imported cars.

But Democrats might see political gain in knocking China too. Soon after GAC Motors' Detroit event, Senate Majority Leader Charles E. Schumer (D-N.Y.) referenced GAC's U.S. entry plan in a speech on the Senate floor, calling China's 25 percent tariffs on imported cars "manifestly unfair, and a typically unfortunate example of China's rapacious trading policies." U.S. Auto import tariffs are set at 2.5 percent

"We're beginning to see a lot of bad press on China" in the U.S., said Taiwan-based Greg Anderson of Pacific Rim Advisors. "Right now, an anti-China position is going to play well politically."

Asked about that, GAC's Yu said, "No comment."

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He's more focused on a dealer network. "That's an expensive, time-consuming and complicated thing to do," said AutoBeat Daily's Hampton.

GAC has joint ventures with Honda, Toyota, Mitsubishi and Fiat-Chrysler.

Fiat-Chrysler dealers may be the company's best bet because it is dropping many of its sedans and coupes to focus on SUVs and trucks. The company is behind most other major car groups in electric car development. GAC could fill those gaps.

Meanwhile, GAC Motors plans to replace the Trumpchi brand name outside China. The phonic similarity to the U.S. president's name "is a sheer coincidence," Yu said. "Trumpchi is similar to 'GAC Motor' in Chinese pronunciation. In Chinese, it means to deliver happiness and auspiciousness."

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