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SAIC Among China Carmakers Keen to Sell in U.S., NHTSA Says

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China’s SAIC Keen to Sell Cars in U.S.
Visitors walk past the Shanghai Automotive Industry Corp. booth at the Auto Shanghai 2011 car show in Shanghai. Photographer: Qilai Shen/Bloomberg

April 21 (Bloomberg) -- SAIC Motor Corp., China’s largest domestic carmaker, is among “a number” of Chinese companies keen to sell their models in the U.S., the National Highway Traffic Safety Administration said.

NHTSA’s administrator David Strickland came to China this week to meet and explain the U.S. agency’s safety standards to the automakers, he said in Shanghai yesterday. SAIC’s car production plant is one of the visits he planned during the trip, Washington-based Strickland said.

China carmakers such as SAIC, Geely Automobile Holdings Ltd. and Great Wall Motor Co. are looking to exports as growth in their home market slows. Deliveries in China this year may miss initial growth forecasts of between 10 and 15 percent, the China Association of Automobile Manufacturers said this month, as the government eliminated incentives that boosted buying in the world’s largest auto market. Chinese domestic brands are projected to match international brands in quality between 2015 and 2018, according to J.D. Power.

“When they offer their vehicle for sale, we will treat them like we will treat any company whether it is a Detroit company or a Japanese company or a Chinese company,” Strickland said in an interview. He declined to name the other automakers.

Shanghai-based SAIC has no plans at the moment to sell cars in the U.S. and is currently concentrating on its overseas businesses in the U.K. and India, Judy Zhu, the company’s spokeswoman, said today.

Quality Gap

“The quality gap between foreign and domestic brands is narrowing,” said Jacob George, managing director at J.D. Power Asia Pacific. Vehicle quality is improving as Chinese brands hire skilled overseas professionals, source parts from multinational companies which supply other global automakers, and adopt recognized quality production processes, he said.

Less than one in four customers experienced problems with such vehicles last year, versus more than half 10 years ago, according to a study by the researcher.

SAIC, which sells the MG Rover-derived Roewe 550 model in China, markets Britain’s MG sports-car brand in the U.K. The carmaker will also start selling vehicles in India this year with partner General Motors Co. SAIC aims to sell 800,000 vehicles outside China annually by 2015, the company said April 19.

“In the future, when we have more suitable products, we may consider more overseas markets,” Zhu said.

Japan, Canada Sales

Chinese sport-utility vehicle maker Great Wall set a goal of selling about one in three of its vehicles outside the mainland within five years, the carmaker said April 19. Great Wall, which forecast annual sales of 1.8 million vehicles by 2015, plans to enter markets such as Japan, Canada and the U.S., to help it achieve that goal.

About 97 percent of the vehicles made in China last year stayed in the country, according to CAAM figures calculated by Bloomberg News. China’s Trade Ministry aims to boost exports by up to 20 percent a year between 2012 and 2015.

The bulk of China’s car exports last year were sold in Russia, Syria and Algeria, CAAM’s data shows. This year, Geely and Chery joined Hebei, Northern China-based Great Wall in selling sedans and trucks in Australia, a prelude to moving into other developed markets. Warren Buffett-backed BYD Co. is also moving beyond the mainland, with plans to bring its E6 electric car to the U.S. by the end of 2011, the Shenzhen-based automaker said in January.

Chinese brands will be able to sell cars in markets such as the U.S. and Europe, as early as in five years, Henry Li, general manager at BYD’s auto export trade division, said at a conference in Shanghai yesterday.

Fierce competition on the mainland will force domestic carmakers to keep improving their offerings, he said.

“Domestic brands are quick learners,” Li said. “Chinese national standards are upgrading all the time. This will push domestic brands up to a higher level.”

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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