Industry News: SAIC Puts Their U.S. Plans On Hold

[William Maley]

Chinese automakers see the U.S. as a land opportunity and have been making promises to start selling vehicles in the near future. None so far have made it. Now one Chinese brand is reconsidering their plans.

SAIC Motor Corp., China's largest automaker and partner with GM, has put their U.S. ambitions on hold. Michael Yang, executive director of SAIC Motor’s international department said at a briefing that they have uncertainties about the trade policy between China and the U.S. due to the election of Donald Trump. Yang went on to say that the company would implement their U.S. strategy once it has gotten clarity. For the time being, SAIC has moved up plans to start selling vehicles in the European Union.

“Eventually we aim to have all, but at the moment we are focusing on” China and then Europe, Yang said. “The reason is the ‘climate change’ after the new presidency.”

This contrasts with another Chinese automaker, Guangzhou Automobile Group Co., (GAC) which plans on entering the U.S. by 2019 with their Trumpchi brand. Although there is talk that GAC is considering changing the name of the brand before arriving in the U.S.

Source: Automotive News (Subscription Required)

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[G. David Felt]

Trumpchi? I see the lawsuits already on that name. Be interesting to see how many hold off on the US market due to the irrational behavior of our current government.

[riviera74]

In the long run, the brand mark will matter a little.  Ultimately the Chinese will probably do what Hyundai/Kia did 25 years ago, which is sell cheap and then build up from there.  How else do you think Toyota and Honda essentially took (a lot of) market leadership from GM starting in the 1980s?  Few people bought a Honda or Toyota back in the '70s but then built the factories here and more and more Baby Boomers went for those cars as time went on over the decades.

I cannot believe that the Chinese will be successful within five years after they show up in dealerships here.  Europe is an even longer shot because that market is very saturated and sales are slowly sinking as we speak.  Without a proper unique selling point, SAIC and Geely and GAC would be better off selling in China and India for the next decade simply because those markets are growing rather than mature/stagnant.

[G. David Felt]

2 hours ago, riviera74 said:

In the long run, the brand mark will matter a little.  Ultimately the Chinese will probably do what Hyundai/Kia did 25 years ago, which is sell cheap and then build up from there.  How else do you think Toyota and Honda essentially took (a lot of) market leadership from GM starting in the 1980s?  Few people bought a Honda or Toyota back in the '70s but then built the factories here and more and more Baby Boomers went for those cars as time went on over the decades.

I cannot believe that the Chinese will be successful within five years after they show up in dealerships here.  Europe is an even longer shot because that market is very saturated and sales are slowly sinking as we speak.  Without a proper unique selling point, SAIC and Geely and GAC would be better off selling in China and India for the next decade simply because those markets are growing rather than mature/stagnant.

I hate to walk this fine line, but this thread tends to force one to acknowledge that there is political ramifications here.

China just launched their 2nd aircraft carrier. China is at odds with the US unlike Japan and Korea. I think there is concern by Chinese businessmen and possible pressure from their own GOV about expanding into the US. 

I honestly think many people around the world are holding off to see what all happens in our own country with our own messed up political mess before investing and moving forward.

Stock markets will take short term gains and then unload to lock in profits, long term is going to be another story and only companies that are already invested with boots on the ground will continue to do business.

We see American companies pulling out of Russia. 

This is an interesting time from a business standpoint on how one considers and invests around the world.

[A Horse With No Name]

19 hours ago, dfelt said:

Trumpchi? I see the lawsuits already on that name. Be interesting to see how many hold off on the US market due to the irrational behavior of our current government.

We are not acting like adults at all as a country, and it is not just political. Everyone (population at large, generalization) wants to pay other people 28 cents an hour for their labor and get paid $28 an hour with 3 weeks vacation and no cost health insurance for theirs. 

Shopping at Walmart and buying cheap Chinese junk is a form of abdication and giving up as an American...I want no part of it.  I ahve gotten rid of my Asian cheap imported machines (most of them anyways) in my home woodworking shop, and replaced them with older American made Iron...tools work much better, and I am not shipping jobs overseas.

...but everything seems to be getting less and less rational with our society.  It will not end well for the Untied States, sadly...

Also, I try to deal with small independent American businesses every chance I get, or at least highly ethical larger businesses.  Two that I really like are Whiteside (100% American made Router bits, wood shaping tools, etc) and Sierra Nevada (Brewer, very good beer, especially the stout).

Both Whiteside and Sierra Nevada ahve awesome corporate ethics IMHO!

The most patriotic thing we can do right now is demonstrate individual responsibility.

Edited April 28, 2017 by A Horse With No Name

[A Horse With No Name]

17 hours ago, riviera74 said:

In the long run, the brand mark will matter a little.  Ultimately the Chinese will probably do what Hyundai/Kia did 25 years ago, which is sell cheap and then build up from there.  How else do you think Toyota and Honda essentially took (a lot of) market leadership from GM starting in the 1980s?  Few people bought a Honda or Toyota back in the '70s but then built the factories here and more and more Baby Boomers went for those cars as time went on over the decades.

I cannot believe that the Chinese will be successful within five years after they show up in dealerships here.  Europe is an even longer shot because that market is very saturated and sales are slowly sinking as we speak.  Without a proper unique selling point, SAIC and Geely and GAC would be better off selling in China and India for the next decade simply because those markets are growing rather than mature/stagnant.

I can agree with this to an extent...the problem is that China is building better and better stuff that is much more able to directly compete with items made elsewhere. Since they have lower labor costs and fewer environmental regulations, at some point consumer demand will drive the rise of Chinese products.

[G. David Felt]

46 minutes ago, A Horse With No Name said:

I can agree with this to an extent...the problem is that China is building better and better stuff that is much more able to directly compete with items made elsewhere. Since they have lower labor costs and fewer environmental regulations, at some point consumer demand will drive the rise of Chinese products.

True will drive it till they reach a point of either killing their own population due to pollution or they wake up and start fixing the problems. Seems fixing is their focus based on their very strong hybrid/ev policy for auto's starting next year.

[A Horse With No Name]

31 minutes ago, dfelt said:

True will drive it till they reach a point of either killing their own population to do pollution or they wake up and start fixing the problems. Seems fixing is their focus based on their very strong hybrid/ev policy for auto's starting next year.

...and Solar and a bunch of other issues.  China lacks the freedoms we do, but at least they seem to be governed by actual adults.

[G. David Felt]

2 minutes ago, A Horse With No Name said:

...and Solar and a bunch of other issues.  China lacks the freedoms we do, but at least they seem to be governed by actual adults.

Yup, guess some places have to have adults in control, many places around the world are clearly lacking in that area.

[A Horse With No Name]

10 minutes ago, dfelt said:

Yup, guess some places have to have adults in control, many places around the world are clearly lacking in that area.

Somalia and Eritrea would come to mind...not exactly countries I would like to imitate.

Edited April 28, 2017 by A Horse With No Name
Spelling

[G. David Felt]

35 minutes ago, A Horse With No Name said:

Somalia and Eritrea would come to mind...not exactly countries I would like to imitate.

Yet the flip side of the issue here is that China owns one of the two big bus companies in California that is building pure battery EV Buses that we will see all over the road later this year and especially next year. You would think that if the Chinese auto companies are flush with cash and have a solid product, why not come to the US compared to Europe. Going into Europe as they are in a depression and clearly have excessive capacity makes no sense to me.

[A Horse With No Name]

2 minutes ago, dfelt said:

Yet the flip side of the issue here is that China owns one of the two big bus companies in California that is building pure battery EV Buses that we will see all over the road later this year and especially next year. You would think that if the Chinese auto companies are flush with cash and have a solid product, why not come to the US compared to Europe. Going into Europe as they are in a depression and clearly have excessive capacity makes no sense to me.

It makes sense to me, they want world domination...and they will be smart about it.  Their culture goes back several thousand years to our three hundred.  All of our political and social developments in this country pretty much point to vandals at the gate, methinks.

Also, pure battery EV buses seem to make an infinite amount of sense.  Low pollution in cities, limited mileage as they start and stop frequently, regenerate braking, lower maintenance, will satisfy the political proclivities of people who live in cities and ride them.

[Frisky Dingo]

Oh, no!!!

 

In all seriousness, even if they do make it over here, I think the market is too big and too far gone for them to ever catch on. The market is already oversaturated and brands that actually have a buyer base and good reputation are having it tough- just look at Mazda.

We are at a point where the car industry is going to start getting smaller with less models and less MFR's, not more.

[Robert Hall]

Pricing and warranty would be crucial....there will always be buyers looking for the cheapest new car, regardless of brand..think of the early days of Hyundai and Kia...cheap mediocre cars that sold on price and warranty..  maybe one of them could get in the market by pairing up w/ Costco or Wal-Mart and peddle the cars through their big box stores...

 

 

[A Horse With No Name]

54 minutes ago, Frisky Dingo said:

Oh, no!!!

 

In all seriousness, even if they do make it over here, I think the market is too big and too far gone for them to ever catch on. The market is already oversaturated and brands that actually have a buyer base and good reputation are having it tough- just look at Mazda.

We are at a point where the car industry is going to start getting smaller with less models and less MFR's, not more.

Mazda is trying to sell a premium small car at a premium price. The
Chinese will come in at the other end of things..

16 minutes ago, Cubical-aka-Moltar said:

Pricing and warranty would be crucial....there will always be buyers looking for the cheapest new car, regardless of brand..think of the early days of Hyundai and Kia...cheap mediocre cars that sold on price and warranty..  maybe one of them could get in the market by pairing up w/ Costco or Wal-Mart and peddle the cars through their big box stores...

 

 

It is inevitable that they wind up in this market, i think.

[G. David Felt]

25 minutes ago, Cubical-aka-Moltar said:

Pricing and warranty would be crucial....there will always be buyers looking for the cheapest new car, regardless of brand..think of the early days of Hyundai and Kia...cheap mediocre cars that sold on price and warranty..  maybe one of them could get in the market by pairing up w/ Costco or Wal-Mart and peddle the cars through their big box stores...

Exactly as to why Drew did that thread on Costco Auto Line. Kirkland Signature Autos if memory serves me correct.