Changing Perception May Prove Toughest Task for Chinese

Perception can be more important than reality.

Take General Motors, which has been building better vehicles of late but still suffers some from its poor quality reputation of two decades past.

Now Geely Automobile is the latest auto maker that must dig itself out of a hole with American consumers – and it hasn’t even started selling cars here yet.

Geely was the first Chinese automobile manufacturer to exhibit its wares in the U.S. when it brought its 7151 CK sedan to the Detroit auto show in January. It plans to launch delivery of the small, under-$10,000 model in fall 2008.

But after analyzing media reports following its Detroit debut and subsequently surveying American consumers, Geely found it already has a not-so-stellar reputation to overcome.

Both the press and those polled questioned whether any Chinese auto maker would have the wherewithal to manufacture a world-class car much sooner than 2015, insinuating Geely could wind up the second coming of Yugo.

Geely’s top U.S. executive insists actual quality will be just fine, however.

Initial testing here already has proven a “pleasant surprise,” says Geely U.S.A. Chief Operating Officer John Harmer, who is certain China’s central government “won’t allow exports to the U.S. unless convinced it will not be embarrassed.”

To avoid any stumbles, Geely will test the waters first in Puerto Rico, a market it says is as demanding as the U.S. Cars sold there will be monitored closely during their first few months of ownership, allowing any last-minute bugs to be worked out before Geely heads for the States.

But the bigger hurdle will be convincing Americans it’s safe to take a chance on a car made in China.

It is “clear (Chinese) quality and reliability is an issue,” Geely’s COO admits.

A one-time lieutenant governor of California, Harmer knows the importance of spin, and he already has hired a public relations company to help turn that tide.

“We can’t wait until we’re on the (showroom) floor to deal with (the perception issue),” he says.

The game plan isn’t complete yet, but among tactics will be a 90-second infomercial that will highlight Geely’s efforts to get its cars ready for the American market.

“We don’t care if we’re the first (Chinese auto maker in the U.S.), we want to be seen as worthy in terms of quality,” Harmer says.

Other experts agree that, despite a skeptical America, quality is improving in China and won’t be an issue much longer.

“Quality isn’t where it is in the U.S., but I would argue it will get there in three to four years,” says Jack Perkowski, who heads Beijing-based auto supplier ASIMCO, which now owns manufacturing plants in Michigan.

“Chinese vehicles can and will meet our standards,” says Rudy Schlais, a retired GM executive who once ran the auto maker’s Asia/Pacific operations.

Still, perceptions aren’t easy to change. If Geely is to succeed in the U.S., it, like everyone else, will need to be spot on with product, quality and price from the outset– and show a lot of patience to boot.

Just ask GM.

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