China-made cars in North America?
DON’T SCOFF: Volvo’s S60 and Buick’s Envision crossover are here with lesser-known brands to follow
China is an unprecedented powerhouse in the global auto industry. The country has been the largest car market in the world since 2009, boasting more than 130 brands and almost 1,000 models, says Forbes.
Now, top players from China are looking to expand to North America.
Last November, as part of Premier Christy Clark's trade mission to China, I signed an important Memorandum of Understanding on behalf of the New Car Dealers Association of British Columbia with the China Automobile Dealers Association (CADA), aimed at strengthening our working relationship.
Since then we have made significant progress with our Chinese counterparts in key areas of consumer, environmental and legal issues of mutual interest.
CADA also sent a special delegation to the Vancouver International Auto Show this past March. In November, I will be returning to China to speak again at the Chinese Dealers Convention.
Although that agreement is historic in its importance to growing the Chinese presence in B.C., it's important to note that ‘Made in China' cars arrived at Canadian dealerships in 2012, when Honda moved production of its subcompact Fit model from Japan to China.
Just this year, the Volvo S60 Inscription took the title of the first Chinese-made vehicle to be sold in the U.S.
It was quickly followed by the Buick Envision crossover in July. Both vehicles are now available in Canada.
More manufacturers plan to follow.
In January, Cadillac announced it will be bringing in a plug-in hybrid version of its CT6 flagship sedan from China later this year.
Leading the way in the North American expansion is Chinese giant Geely Auto, which purchased the flagging Swedish Volvo nameplate from Ford in 2009. Efforts to revive the brand and make it into a luxury competitor have paid off. Though numbers in Canada are still low, DesRosiers statistics show yearto-date sales are up by 17.6 per cent from 2015 as of this August.
High sales of these 2016 imports will open the doors for other manufacturers from the People's Republic that want to make their way across the Pacific.
Less familiar Chinese manufacturers have set their sights on North American auto markets since the mid-2000s, though little action has resulted.
Great Wall Motor Co., China's largest SUV producer, and BYD Auto Co., a leading electric vehicle company, have both announced plans to enter the U.S. market.
Particularly promising is Guangzhou Automobile Group Motor Co., which has put forward a tangible expansion plan — undercutting everything else in the segment according to Automotive News.
General manager Wu Song announced last year that the company could launch in the U.S. as soon as 2017.
The manufacturer's strategy is to provide the best bargain around, setting prices at 30 per cent less than any competing models.
Though the strategy seems to have selling power, it might be playing directly into the challenge that any manufacturer based in the People's Republic will face — the 'Made in China' stereotype of shoddy quality and second-class products.
First things first; the quality gap of China's auto industry versus other countries is quickly closing.
Nameplates like Geely are offering models that boast features on par with any other vehicle in the segment. For example, the Geely Boyue can receive voice commands in order to direct owners to the closest gas station.
New cars are often hyper-connected with autonomous features and advanced technology.
As this gap closes, China's situation has parallels to that of South Korea from 20 or 30 years ago. Brands like Hyundai and Kia were just starting to enter North American markets and consumers were reluctant to buy from an unfamiliar Asian label.
With persistence and marketing however, these nameplates are now seen across the continent.
Many analysts predict China will have similar success; all it will take is smart marketing, an investment in quality, and a decade or two to win over North American consumers.
Auto Note: I want to extend my congratulations to Kelowna dealers, who pitched in $1 million toward an Automotive Trades training area at Okanagan College's new trades training centre.
There are thousands of positions opening up in the auto industry, and this is an important step to help people access them.