Chinese Automakers Face Hurdles in U.S. Market

Glitz, Spectacle in Detroit

Chinese cars like the Liebao are making a big splash at the North American International Auto Show. i i

Chinese cars like the Liebao are making a big splash at the North American International Auto Show in Detroit, where five Chinese automakers are represented this year. David Gilkey, NPR hide caption

itoggle caption David Gilkey, NPR
Chinese cars like the Liebao are making a big splash at the North American International Auto Show.

Chinese cars like the Liebao are making a big splash at the North American International Auto Show in Detroit, where five Chinese automakers are represented this year.

David Gilkey, NPR

Although it will be a few years before Chinese cars are selling in U.S. showrooms, their presence at the North American International Auto Show in Detroit is creating quite a stir.

Five Chinese automakers are represented — up from two last year, which sends a clear signal that China is setting its sights on the lucrative American market. In a couple of years, Americans might be able to get a good deal on a Grand Tiger, a Strip of Cloud or perhaps a Liebao.

"In a very few years' time, China is going to be the largest and richest economy in the world. We're going to slip gently into second place," says Bob Lutz, vice chairman of General Motors.

But Lutz says no one is panicking because U.S. automakers already have a huge presence in China, where they're selling cars and setting up joint ventures.

"We are an integral part of the Chinese automobile industry, so as China grows, we will benefit," Lutz says.

Also, Chinese automakers face some big hurdles before they can penetrate the U.S. market. With relatively cheap labor, they can produce affordable vehicles, but their cars lack many of the basic features and comforts that American consumers now demand.

Paul Eisenstein, publisher of TheCarConnection.com, says the Chinese face more serious challenges.

"We saw some tests out of Europe just a few months ago where the Europeans ran a crash test, and [the Chinese] car folded up like an accordion," Eisenstein says. "One of the comments made by an executive was, 'Well, we sell our cars to people who drive safely.' Well, I don't think that's going to fly or meet federal mandates in the U.S. or Europe."

That's why Mike Jackson, the president of Auto Nation, the largest chain of car dealerships in the U.S., announced in Detroit that he wouldn't sell Chinese cars — not yet, anyway.

The Chinese say they hope to be selling cars in the U.S. within two or three years, but they understand the challenge.

"We are not sure whether we can pass the qualification or safety test in the United States," says Waping Jong, the chief designer of Cheng Fung's new diesel SUV. "We have a lot of work to do with the qualification."

Glitz, Spectacle and New Cars on Display in Detroit

A 2009 Dodge Ram Crew 1500 truck drives through a herd of cows on the streets of downtown Detroit i i

A 2009 Dodge Ram Crew 1500 truck drives through a herd of cows on the streets of downtown Detroit Sunday afternoon as part of the North American International Auto Show. Stan Honda/AFP/Getty Images hide caption

itoggle caption Stan Honda/AFP/Getty Images
A 2009 Dodge Ram Crew 1500 truck drives through a herd of cows on the streets of downtown Detroit

A 2009 Dodge Ram Crew 1500 truck drives through a herd of cows on the streets of downtown Detroit Sunday afternoon as part of the North American International Auto Show.

Stan Honda/AFP/Getty Images
Dieter Zetsche (left), chairman of Daimler AG, poses with actress Kim Cattrall i i

Dieter Zetsche (left), chairman of Daimler AG, poses with actress Kim Cattrall of the TV series Sex in the City on Sunday, during the presentation of the Mercedes-Benz New Generation SLK SUV. Stan Honda/AFP/Getty Images hide caption

itoggle caption Stan Honda/AFP/Getty Images
Dieter Zetsche (left), chairman of Daimler AG, poses with actress Kim Cattrall

Dieter Zetsche (left), chairman of Daimler AG, poses with actress Kim Cattrall of the TV series Sex in the City on Sunday, during the presentation of the Mercedes-Benz New Generation SLK SUV.

Stan Honda/AFP/Getty Images

Hundreds of shiny new vehicles are on display at the annual North American International Auto Show, which is under way in Detroit. But the highlight of the show is the grandiose product unveiling — something the auto for which the show is famous.

An American cultural phenomenon, the event is a reflection of the country's love affair with the automobile — and its addiction to kitsch.

Hyping Machines

Car makers are employing strobe lights, pyrotechnics, cowboys and even cattle in their efforts to publicize new models — known in industry parlance as the "reveal."

In an arena filled to capacity — mostly with the press — Ford unveiled its newly redesigned F-150 pickup truck Sunday afternoon.

The truck emerged from the back of the stage through a cloud of blue smoke and flickering strobe lights. Then, country-and-western singer Toby Keith talked up the virtues of the new truck.

"It's roomy, the interior is really slick, but it's still roomy for a big guy like me," he said.

Amid more strobe lights and smoke descended Ford's new small, fuel-efficient concept car: the Verve.

The event embodies the dichotomy of this year's show: on the one hand, Detroit's commitment to green; and on the other, its continued reliance on big trucks. But longtime industry observers say this "reveal" is a disappointment.

"It was slightly underwhelming because there wasn't an attempt at something grandiose. There was just, 'Here's a truck, and, oh look, there's Toby Keith,'" says Ray Wert, editor in chief of Jalopnik.com, a self-described Web site obsessed with car culture.

Cattle on the Streets of Detroit

This week's most anticipated reveal was for Chrysler's new Dodge Ram pickup truck. Two brand-new trucks joined a dozen cowboys herding 120 head of longhorn Texas steer through downtown Detroit.

It was a great idea, but in the end, it was just a group of big cows lumbering down the street. Then, when Chrysler Vice Chairman Jim Press tried to talk about the new truck, some of the steers began to mount each other.

"Well, let's not watch that. This is one show you're not going to forget. OK, look at the truck," he told the crowd.

Industry Pins Hopes on High-Profile 'Reveals'

Auto companies spend millions of dollars on these events — even at a time when the industry is struggling. But with some 5,000 journalists here — and thousands more picking up the images around the world on the Internet — they're a chance for automakers to push their brand.

Micheline Maynard, who covers the auto industry for The New York Times, says Chrysler is known for these spectacles.

"It's dropped minivans out of the ceiling; it's crashed Jeeps into and out of Cobo Center [site of the Detroit auto show], so I guess if you're going to make a point about how tough your truck is, why not round up 120 Texas longhorns and run them down the avenue in front of the convention center?"

But Wert of Jalopnik.com wasn't so sure.

"It was funny to watch. I don't know what it did to sell trucks," he says.

Marketing 'Blizzard' Makes Big Impression

Wert's favorite reveal was two years ago when Chrysler unveiled its Aspen SUV.

"They had a virtual snowstorm that blinded the audience in white to the point that you couldn't see the vehicle in front of you. But everyone remembered it because they were picking pieces of the paper out of their hair and clothes for the next month and a half," he says.

Wert says it's unclear if the fake blizzard helped sell cars, but he says it definitely made an impression. And that is apparently the point.

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