GAC Motor President Yu Jun (center) says the company will be ready to enter the U.S. market in 2020.
The first Chinese automaker expected to make an incursion into the U.S. market has put on the brakes for a little while. GAC Motor is delaying its entry into the U.S. market until 2020, due in part to ongoing trade tensions between the U.S. and China.
However, it may not be as simple as the trade climate between the two economic superpowers is too volatile for a Chinese company to set up shop in the U.S. right now.
Yu Jun, GAC Motor president, told TheDetroitBureau.com that the automaker was still working on getting its vehicles ready for the U.S. market. He believes they meet regulatory standards now, saying the company was working with U.S. regulatory agencies to ensure compliance. However, he wouldn’t confirm they met U.S. spec yet, preferring to say the will when they come to the U.S.
Though the company believes it will be ready for the U.S. by next year, that’s likely more from a legal standpoint than a practical one. Currently, the GAC Motor doesn’t have a dealership, although it plans to have one.
(Chinese automaker Zoyte planning to sell vehicles in U.S. by 2020. Click Here for the story.)
He says the company is working to put those other pieces in place, ensuring it will be ready to move when the U.S. and China sort out their trade issues and the its vehicles meet with compliance standards.
Jun, speaking through an interpreter, pointed out that the company now has three research and development centers in the U.S. – two in California and one in Michigan – and that it has established a sales company to tackle that portion of the business.
The next step is to set up a dealer network. Jun said he and other executives are headed to the National Auto Dealers Association show in San Francisco next week to meet with potential dealers.
It’ll be the second time in as many years company officials have attended the show looking for potential dealer candidates. Last year, Jun said the response was strong with 130 dealership representatives expressing interest in acquiring a GAC dealer franchise. Those people, he noted, represented 30 states and more than 1,100 other dealers.
(Click Here for more about Chinese automakers eyeing international roles.)
There may be one more hurdle GAC needs to clear: a captive finance unit to allow potential buyers to purchase vehicles. Jun said that decision hasn’t been made yet; however, GAC could work with any of a number of existing banks and finance companies to handle the financing of its vehicles.
The company, which sold more than 535,000 vehicles last year in 16 countries, does have an internal sales targets for the U.S., but Yun declined to reveal them saying “there are so many uncertainties and unpredictable factors in the U.S. market. We’ll continue to work harder to raise our brand awareness in the U.S. market and move toward that goal.”
The company does have one big trend working in its favor: Americans are shifting away from buying cars in favor of SUVs, crossovers and trucks and GAC is flush with sport-utilities, he pointed out.
(For more about GAC’s plans to be first to sell a Chinese-branded vehicle in the U.S., Click Here.)
While he was excited about that prospect, he was quick to point out that the company will rely on its R&D centers make sure the company was keeping its finger on the pulse of shifting preferences in the U.S. market, adding that GAC’s focus on quality – he mentioned that GAC finished atop the J.D. Power Initial Quality Study last year – will help gain the faith of customers.