Do not disappoint the U.S. consumer, an industry analyst warns in the wake of a study that suggests Americans are warming up to auto makers from China and India.
The study by California-based consultancy AutoPacific says 15% of U.S. new-car buyers would consider vehicles produced by China-based brands, while 11% would contemplate Indian marques. Meanwhile, the first offerings from either country are at least seven months away from arriving in U.S. showrooms.
Against this backdrop, consideration rates are 16% for South Korean auto makers such as
Motor Co. Ltd. and Kia Motors Corp. Their vehicles have been on the U.S. market for more than two decades and, in the case of Hyundai, recorded dramatic improvement in quality studies.
AutoPacific was “a little surprised” by the findings, says Stephanie Brinley, senior manager-product analysis, adding expectations of lower prices took a back seat to greater openness.
“More has to do with the fact that people understand we are in a global economy and are more willing to buy products that aren’t built in the States,” Brinley tells Ward’s.
While acceptance levels revealed in the study represent a “huge opportunity,” she warns American consumers can be unforgiving, so sales success is not a “slam-dunk” for new players from China and India.
“There’s a lot of risk,” Brinley says. “If the product doesn’t meet what (consumers) expect, they won’t consider it again.”
India’s& Mahindra Ltd. will be fist to test the waters as China-based OEMs are beset by a string of broken promises. Through its American arm, Global Vehicles USA Inc., Mahindra is scheduled import a line of small, diesel-powered pickup trucks in time for a February 2010 showroom debut.
“The interior refinement is there; obviously, the safety features are there,” says Max Butler, Global’s vice president-marketing. “This is not a truck that’s being brought over here without a nod to the American market.”
Butler is not surprised by the AutoPacific study because Global’s own research suggests vehicle origin has little influence on buyer perception. “It’s fascinating because we never get the question, ‘Is it going to be reliable?’” Butler tells Ward’s.
AutoPacific President George Peterson says U.S. consumers already are accustomed to buying high-tech products from China, “Why not automobiles, too?”
Americans most likely to consider vehicles from China and India “tend to be young, well-educated and affluent, for their age, and have good jobs in administrative, health care and middle-management,” Peterson adds.
Steve Taylor, who owns Kia andfranchises and plans distribution from his Taylor Automotive Family enterprise in Toledo, OH, introduces a more ominous motivation: consumer backlash. “We’re seeing more and more people that are discouraged by the government bailout of GM and ,” he says.
Buyers who profess an attraction to Chinese and Indian marques also are more likely to be current owners of Japanese- or Korean-brand vehicles, the study says. Reliability and durability are high among the priorities of study participants, who “are not as interested in the dynamics of a vehicle (such as) handling, braking acceleration,” AutoPacific says.
Meanwhile, U.S. launch timing for China-built vehicles is fuzzy.Automobile Co. Ltd., which reneged on a planned 2007 U.S. product introduction and later, under a cloud of suspicion about its engineering competence, dissolved its partnership with the former Group, recently launched a campaign to combat the resulting poor publicity.
’s website describes a plant tour it hosted for journalists from countries such as Russia, Turkey, Venezuela and Brazil. Of one journalist, Chery claims, the tour “completely changed his opinion (of) ‘made in China.’”
Chinese America Cooperative Automotive Inc. (Chamco) had plans that rivaled Chery’s, but unraveled in an internal management dispute.
Taylor expects to be selling cars fromAuto Group in 2011, the same year BYD Auto Co. Ltd. has promised the U.S. launch of an electric car.