Changfeng Sees Small Initial Volumes in U.S.

DETROIT – Selling just north of 30,000 units in its home country last year, China’s Changfeng Group Co. Ltd. has ambitions of entering the U.S. market in 2009.

But unlike competitors’ previously announced plans to bring Chinese cars to the U.S., Changfeng has no illusions of immediate success.

“At the beginning stage, we’re thinking just a small volume,” Shi Yi Min, Changfeng vice general manager, tells Ward’s. “The U.S. market is a very developed auto market, so first of all we need to know consumers’ ideas.”

Changfeng is showing five vehicles at the 2007 North American International Auto Show here under the Liebao brand name. All are SUVs: the Feiteng, two Black Giant variants, the CS7 and CS6.

Min says Changfeng came to the Detroit show, the largest in North America, to better understand the tastes of U.S. car buyers.

“We (want) to know differences between customers in the Chinese market and the American market,” he says.

Changfeng plans to enter the U.S. market in 2009 but has yet to submit its vehicles to the U.S. Environmental Protection Agency and National Highway Traffic Safety Admin. for testing. Min says he expects this to happen before next year.

When asked about Chinese competitor Geely Automobile Co. Ltd., which displayed a vehicle at last year’s Detroit show but later decided to push back plans to enter the U.S. market by 2008, Min says the two auto makers face similar hurdles in the way Americans perceive the quality of Chinese-built vehicles.

Min says Changfeng spent three years investigating the U.S. market before it decided to sell vehicles here.

Changfeng already ships vehicles to Africa, the Middle East, Southeast Asia and Russia, exporting more than 3,500 vehicles last year. The auto maker employs 6,300 workers and has three manufacturing plants in China.

Min says a future U.S. plant or research and development center is possible. And he doesn’t rule out a partnership with a larger auto maker, such as the recently signed deal for Chery Automobile Co. Ltd. to supply DaimlerChrysler AG with subcompact cars for the U.S.

For the time being, Changfeng will proceed with plans to sell cars in the U.S. solo, Min says.

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