China: A Rising Car Star?

By Jeremy Caplan

As if U.S. automakers didn't have enough to worry about, new competition from the East is revving up. Jiangling Motors Co. (JMC) set up shop in the Netherlands this year, selling 400 cars in its first month. This fall it is moving into Poland as well. And JMC isn't alone. A growing number of China's 100-plus automakers, including Zhongua, which will soon sell cars in Germany, are eyeing Western markets. The Chinese have had great success in selling low-cost automaking tools worldwide, says Jay Baron, president of the Center for Automotive Research; marketing assembled cars is the next logical step. A common Chinese auto strategy has been to join forces with foreign firms to develop the home market. The Shanghai Automotive Industry Corp. has partnered with GM, and DaimlerChrysler AG is raising its stake in a venture with Beijing Automotive Industry Corp. to 50%, up from 42%. The converse is happening as Chinese makers aim for the 16.9 million-- vehicle U.S. market. The first player may be Chery, based in Wuhu City, which is partnering with Visionary Vehicles, a distributor based in New York City, to sell compacts for less than $7,000. --By Jeremy Caplan