The Red Chinese are coming, the Red Chinese are coming, seems to
be the cry from Lou Dobbs about the advent of two Chinese car
companies, Chery and Geely, which may grace American showrooms
beginning in 2007. But this is just the latest instance of Dobbs
baseless scaremongering about the U.S. economy.
The CNN anchor anticipates success for Cherys business in the
United States, even though it is outsold in China by General Motors
Corp. And its cars are being imported to the States by the same
businessman who brought in the failed Yugo in the 1980s and whose
Japanese auto partnership, Subaru, captures less than 2 percent of
the U.S. market.
Worried about Chery and rival Geely, Dobbs complained about the
$3.50-an-hour it costs to employ a Geely factory worker. Well,
there's no problem, Dobbs said sarcastically, It's all about
competition, right? Forget the living wage and a living standard.
Unfortunately for Dobbs career as a prophet of doom, Chery is
considered a substandard brand to General Motors (NYSE:
GM)
products, which outpaces it in sales within China itself.
Vehicles manufactured by competitor Shanghai Automotive, a Chinese
manufacturing subsidiary of General Motors, have done better in
China than home-grown Chery. Reuters reported on January 9 that GM,
which operates in a partnership with Shanghai Auto, sold 665,000
cars in China in 2005 and has taken the top spot there in terms of
market share with its Buick brand.
One reason Chinese car buyers may prefer GM brands to Chery is that
the Chinese companys designs may well be a cheap, illegal knockoff
of American engineering. Bill Vlasic of the
Detroit News reported a year ago in the Jan. 2, 2005, paper that
Cherys top-selling vehicle in China, the QQ, is the subject of a
bitter legal battle with GM, which charges that the small sedan is a
direct copy of GM's Chevrolet Spark.
Vlasic added that the company was still considered a second-tier
Chinese auto manufacturer behind Shanghai Automotive Industry
Corp.'s joint ventures with industry giants GM and Volkswagen AG.
In the United States, Chery might end up being more of a cellar
dweller than second-tier among American car buyers. Its arrival on
U.S. shores will be courtesy of the man who gave us the Yugo.
Chery automobiles will be imported to the U.S. in 2007 under an
arrangement with Visionary Vehicles, a company run by Malcolm
Bricklin, the automotive genius behind Subaru and Yugo. As Bill
Koenig of Reuters http://www.nysun.com/article/7177 reported on
January 4, the Yugoslavian-manufactured car lasted a mere five years
in the U.S. with peak sales at 50,000, while Subaru, according to a
recent
press release sold a total of 196,002 units in 2005, or
roughly 1.2 percent of the 17 million
new car sales economists predict for 2006.
CORRECTION: The article above is a corrected version of the original
submission from Jan. 12, 2006. In the original article, Malcolm
Bricklins last name was incorrectly given and Bricklin was
described as the American importer of the Geely line of automobiles.
Bricklin is the importer for Chery.
