GMDAT, Chery Legal Battle Could Enter U.S.

DETROIT – General Motors Corp. would consider legal action if entrepreneur Malcolm Bricklin decides to import the China-built Chery QQ car to the U.S.

GM owns a 42.1% stake in South Korea-based GM Daewoo Auto & Technology Co., which has filed a lawsuit in China against Chery Automobile Co. Ltd. due to the “extreme similarities” between the Chery QQ model and the Daewoo Matiz-based Chevrolet Spark.

The QQ and the Spark are sold in China. GMDAT also has filed a petition in China to “invalidate certain design patents held by Chery.”

“We have in a couple of other markets seen this product introduced and we have taken legal action,” GM Chairman and CEO Rick Wagoner tells the media here at the 2005 North American International Auto Show.

Chery QQ

“I don’t know that he (Bricklin) plans to bring that (the QQ) to the U.S. If he does, we will obviously review our options.”

Bricklin, who announced last month that his business, Visionary Vehicles LLC, will become the first company to import Chinese-made vehicles into the U.S. beginning in 2007, says he does not plan to sell the current QQ model. (See related story: Bricklin: Chinese Cars Good for American Workers; Hyundai a Model)

The five unidentified Chery models Visionary Vehicles will import from Chery presently are in various stages of development.

Regardless of Visionary Vehicles’ intentions, Wagoner says it likely will take several years before China-built vehicles are competitive by U.S. standards.

“My sense is, when you look at other entrants into the market, whether it’s the Europeans in the 1950s, the Japanese in the 1960s and 1970s or the Koreans in the 1980s, it takes a while to get to the meat of the market,” Wagoner says.

“There is a tendency to come in with low-price stuff. People keep the car for seven minutes and then say, ‘Oh, we have a problem here.’ You go back and say, ‘That doesn’t work. What are the requirements of the customers?’

“ That cycle takes some time,” he says. “Look, the Chinese are fast learners. One would be crazy to assume they won’t be a competitive force. I don’t know if it’s five years, seven years or 10 years.”

[email protected]