One of China's big car manufacturers recently cited rigorous scrutiny by US regulators as the reason why the company does not intend to export to the US.
Once Chinese automakers improve production, they will have to learn how to market their vehicles in North America. For Chinese companies, marketing abroad has long been a major sticking point.
How many, for instance, can remember LG's former name, Lucky Goldstar? And how many Americans can pronounce the names of many Chinese car factories?
Without being able to build stronger brand awareness and image outside China, obscure-sounding Chinese carmakers will find it difficult to break into foreign auto markets at a time when global branding has never been so vital.
But their troubles won't end there. By the time Chinese automakers figure out how to manufacture more efficiently, attain consistent quality and safety standards and market their cars in America, their current models will be obsolete. At the moment, nearly all newly designed sports utility vehicles in China resemble the BMW X5, but how long will this appeal to consumers?
LAGGING R&D
Lagging research and development is sealing China's automobile sector in a time capsule.
Consolidation in China's auto industry will necessarily occur over time, helping to resolve many of these issues, if properly guided by sound government policies and continued economic liberalization.
In the meantime, US car dealers face a dilemma: Should they spend money now to get involved with the Chinese auto industry, or risk being left along the roadside in a cloud of dust?
Many see little economic rationale for positioning themselves to (one day) ship over boatloads of Chinese-made cars and set up distribution, a long and costly process. They are skeptical of Chinese imports and inclined to toss away what they think is a bare-bone opportunity.
But should they be?
Any shrewd observer who has visited auto plants in China over the past few years, and who recognizes the changes shaping up, might say, with a hint of irony, another Chinese adage: "If you get on the train today, you'll overpay your fare; but if you don't get on today you will be left behind in the dust."
Siva Yam is president and Paul Nash is associate director of the US-China Chamber of Commerce.
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