Chinese Cars: Redefining the Market
News reports over the last few months have the next "invasion" of Chinese cars for the North American market featured. What has been the attention of many car buffs have the very low prices, which are sold each model. Rates as low as $ 6600 was for a model with a handful of other models are also expected to retail for well below quoted $ 10,000. If Chinese cars are not as expected, after a massive change in the way entry-level model built cars soldin the U.S. and Canada. Consumers are increasingly competitive with the win, although exactly what they are getting for the price is not yet known.
The Chevrolet Aveo, a subcompact car the Korean unit GM Daewoo is currently being built in the cheapest car in the U.S. retail selling for as low as $ 9300 after all discounts have been applied [EIA is currently at $ 9890 for the "Special Value "Models]. A 16-valve 1.6L I4 to a 5 speed manual transmission is standard pairedChevy and kicks in an AM / FM radio for good measure. In addition, the car is really deprived.
On the other hand, two Chinese automakers prepare to enter the U.S. market, probably as fast as in the summer of 2007. Selling the 2008 model year cars, both the Geely Automobile Company and the Chery Automobile Company, working with U.S. representatives to build nationwide networks of dealers. Chery, which must change its name after the loss of General Motors in a court decision on the name[too close to Chevy], has a model at the time as "QQ" based Daewoo Spark, want to bring them to the U.S. in conjunction with up to four different models, the cars range in price from just under $ 7,000 to range as high as $ 20,000. Geely has similar good cars that they are planning on marketing.
So what does this mean to the market? Plenty. In addition to the Aveo, also numerous other small vehicles in the United States, including Toyota's Scion brand, the Honda Fit, Nissan Versa,Saturn ION, and offers from Kia and Hyundai. Some of these vehicles are better than the base-equipped Aveo, but in most cases, comparably equipped, entry level models with air conditioning each retail for about $ 12,000.
Even after the air conditioning and certain safety measures [such as airbags and improved wing] is designed to China's entry model vehicles, it is expected that comparably equipped Geely and Chery models are still used for retail sales between $ 8-8500. This picture is a mixedPrices of up to 30% when compared to competing models.
Of course, the quality of Chinese cars are a big worry. Not known for building much of anything that is in an excellent quality of China, like Japan, more than 40 years, must bring about quality. Still, for even $ 1,000 per vehicle, an extended warranty similar to the 100,000 miles warranty from Hyundai and Kia could be offered to allay consumer concerns. Just add the cost of the warranty at the price and a $ 9000 fullyGeely might be justified very attractive.
Thus, the reactions of the competing manufacturers? By lowering their prices accordingly. Looking specially equipped Scions, Hyundais and Kias to appear in U.S. showrooms under $ 10,000. Soon to Mexico Scion fighter built to Ford and Dodge also show and are sold incredibly low prices. By 2010, the price for many entry-level models in the U.S. at $ 10,000 will be if they do not correspondingly, many prices that are notsell.
Long term, prices would generally begin to fall for all vehicles, especially Chinese manufacturers to market cars that are bigger and better than base models start safe. Already mentioned was a $ 20,000 vehicle in the area. This special Chery model is very similar to the Chrysler Pacifica and imports could be directed against him and other competing crossover vehicles.
Of course, the impact on the U.S. manufacturing sector could be disastrous, not only for GM,Ford and DaimlerChrysler. Toyota, Honda, Nissan, Hyundai and all the cars built here. Will they compete in the price or the consumer will see the significant differences in quality and stick with the best brands?
A revolution is the automotive industry – one that is sure to define completely new to the market.
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