Chery Set for U.S.; Chrysler B-Car Still Undetermined

Despite recent media hype, Chinese auto makers will not storm North America anytime soon, but once the rush begins Chery Automobiles Co. Ltd. stands the best chance of succeeding among China's growing list of export-minded car OEMs, a panel of automotive experts concludes.

Although the relative newness of some of the up-and-coming Chinese auto manufacturers makes picking a winner difficult, Michael Dunne, managing director-China for J.D. Power and Associates, says Chery is the horse to “bet on” and is “on a level all by itself in China.”

Still unclear is whether Chery will enter the U.S. as the maker of Chrysler LLC's upcoming B-car. With or without Chrysler, Chery is a strong contender.

While it is not partnered in one of China's major joint ventures, Chery placed No.4 in market share last year behind GM-Shanghai Automotive Co. Ltd. and expects to hold its position for 2007, with aims to triple sales to 1.4 million vehicles by 2012.

Although flush with success, Lin Zhang, general manager of Chery International, acknowledges setting up sales and distribution operations in the U.S. presents opportunity but also considerable risk.

“The U.S. is our biggest challenge,” he says. “No question, (it) is the most competitive and demanding market in the world.” In addition to meeting safety and emissions requirements, “customers have high expectations of quality. We need a strong dealer network.”

Zhang makes his remarks at a recent conference in Birmingham, MI, marking his first public appearance in Detroit since his company finalized a partnership with Chrysler in July to build small cars. “We're very glad to have signed a strategic opportunity with Chrysler,” he says.

Indeed, before setting up shop as a standalone company, Chery's first car for the U.S. likely could wear a Dodge badge, although Zhang says the vehicle will be built using one of Chery's existing platforms.

“We don't have a timetable,” he admits but tells reporters the car could be sold in the $10,000 range, depending on the vehicle and the strength of the dollar. Whether that will be the Dodge Hornet small concept car remains undetermined.