China’s GAC Moving Closer to U.S. Entry

DETROIT – Chinese automaker Guangzhou Automobile Group Co. says it expects to launch sales in the U.S. within the next three years, following establishment of a local R&D operation later this year.

The company’s ambitions are on clear display here, where it is among the first Chinese vehicle manufacturer to have a stand on the main exhibition floor at the North American International Auto Show.

GAC’s exhibit fits right in among the giant displays of more established brands on the main floor, a far cry from the Chinese automaker’s earlier displays at the Detroit show, which were relegated to the Cobo Center basement or outside the hall on the main concourse.

The automaker reveals three new vehicles here, including a hybrid-electric concept it calls the EnSpirit, an electric vehicle named the GE3 and its exhibit centerpiece: a midsize CUV it calls the GS7.

Officials say it is unclear which models would come to the U.S., but the GS7 would appear a prime candidate given the popularity of the CUV segment. Executives say there’s still work to be done to get GAC vehicles certified to U.S. safety standards, however.

“I hope it will be 2018,” GAC President Feng Xingya tells reporters through an interpreter. “But undoubtedly we will export our products to the U.S. market no later than 2019.”

In 2015, GAC predicted it would be in the U.S. by 2017.

GAC, which partners with Fiat Chrysler Automobiles in China, says it won’t decide on a location for its R&D operation for at least a couple months, but the company is believed to be eyeing the West Coast, presumably Southern California, where several Japanese and Korean automakers have U.S. headquarters.

The new R&D center, initially staffed by up to 15 people, will be “the first step into the North American market and a milestone for us in the internalization process,” Feng says.

“The R&D center is definitely a crucial part for us,” he adds. “We must understand what the consumer wants (and) all the detailed parts of (safety and emissions) regulations. And we need to absorb the most updated technology, for example around electrification and intelligence.”

Feng says GAC is targeting 5%-10% of its sales in export markets by 2020. Deliveries in China totaled 380,000 vehicles last year, the automaker says, making it the No.5 Chinese brand in the domestic market. It exports vehicles to 14 countries.

[email protected] @DavidZoia