China’s Zotye Sets Sights on U.S. Market

SAN FRANCISCO – The first Chinese-brand vehicle to enter the U.S. market may be from a little-known automaker in eastern China’s Zhejiang province.

Zotye, as the brand is known in English, still needs to clear the usual regulatory hurdles. If it does, the importer and dealers who are signed up to sell the Chinese autos figure it will fill a niche in the U.S. market.

“There is an affordability crisis” in the U.S. auto market, Duke Hale, chairman and CEO of Zotye USA, says at the National Automobile Dealers Assn.’s annual show here.

Zotye (pronounced ZOH’-tay) will fill a void for good value for the price that Japanese and Korean manufacturers left as they moved upscale, he says.

Hale’s company, Fountain Valley, CA-based HAAH Automotive Holdings, signed a cooperation agreement with Zotye in February 2018 and aims to begin selling the Chinese vehicles in the U.S. in fourth-quarter 2020. Hale says the first model will be a subcompact or compact SUV, and the next will also be an SUV.

The price for the first model will be $28,000, Robert Pradzinski, Zotye USA senior vice president-sales, tells Wards.

Guangzhou Auto, another Chinese automaker, has slowed plans to enter the U.S. market due to the ongoing trade war between China and the U.S. Though currently suspended as the two sides talk, Chinese auto imports could face a 25% tariff if no agreement is reached.

“The import tariff doesn’t scare us,” Pradzinski says, adding, “If there is no tariff, that will give us an opportunity to lower the price.”

Zotye isn’t afraid of tariffs, Pradzinski says. Management figures “if they can sell cars in the U.S., they can build their brand in China,” he says.

It could use some building. The automaker sells more than a dozen models of internal-combustion engine vehicles and two electric vehicles. In 2018, its sales fell 26% compared to the previous year to 233,573 units, according to LMC Automotive.

No Zotye models have yet been homologated for the U.S. market. Zotye USA has hired Mac Yousry’s Global Vehicle Services of Orange, CA, to oversee that process, Hale says.

As for ensuring the vehicles meet U.S. safety and “driveability” standards, Gordon Dickie, Zotye USA senior vice president-R&D, engineering and aftersales, will handle that, Hale says. Dickie has a team on the ground in China, he says.

Dickie previously worked for Mazda and Kia in positions related to engineering, service and parts, and quality.

A handful of the U.S. dealers who have already signed on to sell Zotye were at the brand’s booth at NADA, including Larry Battison, owner of Battison Honda in Oklahoma City, and his daughter, Courtney (below, left).

“What excited us about Zotye is we don’t have to pour a lot of money into a facility,” Battison told Wards.

Battison will sell Zotye vehicles from two locations, an extra property he owns near his Honda dealership in Oklahoma City and a small space in a shopping center in Norman, OK.

Hale touts Zotye’s “very transparent” sales process, including online sales, “immediate access to information” and an online owners’ manual, as well as a “No Haggle, No Hassle” motto.

“That is what Millennials want,” Hale says.

The Battisons are convinced.

Courtney Battison, 36, will handle the Zotye business. “The customer experience will be really different,” she tells Wards.

They will market the brand as “a good quality vehicle at a price point that will be very appealing,” Larry Battison adds.