Most aptly timed sales launch in car history?: Guangzhou Auto to begin sales in the US with its ‘Trumpchi’ brand

GAC plans to use a research centre it is setting up in Silicon Valley to deepen knowledge of local consumer preferences

PUBLISHED : Monday, 09 January, 2017, 5:20pm
UPDATED : Monday, 09 January, 2017, 5:40pm

Guangzhou Automobile Group Co, which produces cars in China with Fiat Chrysler Automobiles NV, plans to start exporting its own brand of cars to the US next year and become the first Chinese carmaker to begin retail sales to American consumers.

GAC, which created its “Trumpchi” brand in 2010 after being a production partner for foreign carmakers for more than a decade, will start a research and development centre in Silicon Valley in the first half of this year to prepare for the company’s entry to the US, the company’s president Feng Xingya said.

“Exporting to the US is a key part of our efforts to become a global player and success in North America is a vital yardstick,” Feng said on the launch day of the Detroit Motor Show, and 12 days before the car’s namesake is due to be sworn in as the United States’ 45th president.

“We won’t ship our cars here before we are fully confident that our cars would nail it.”

Chinese automakers have set their sights on breaking into the US retail market with their own brands for a long time, with Warren Buffett-backed BYD Co and Volvo Cars owner Zhejiang Geely Holding Group Co declaring their American ambitions at least nine years ago.

Neither have been able to meet that target, though BYD has begun to sell electric buses to fleet owners in the U.S. and Volvo Cars is exporting made-in-China vehicles to American showrooms.

For state-owned GAC, a successful entry will mark the culmination of at least five years of preparation. The Guangzhou, China-based company is working to develop models tailored for the US market to ensure their cars will appeal to local consumers and meet all regulatory requirements, Feng said.

GAC plans to use the research centre in Silicon Valley to speed up research into connected cars, recruit talent and deepen its knowledge about local consumer preferences and government regulations, Feng said. The research center will also help the company identify acquisition targets that may help with the company’s development of advanced technologies, he said.

GAC’s export plan comes as competition in China intensifies, with demand expected to grow at a slower pace. While Chinese automakers like Great Wall Motor Co and Chongqing Changan Automobile Co have been exporting to overseas markets, GAC would be the first to take a brand to developed markets with stricter emission and fuel-economy rules.

The company almost doubled its delivery of Trumpchi vehicles last year to more than 380,000 units on the popularity of its GS4 and GS8 sport utility vehicles. The automaker expects to have about 10 percent of Trumpchi sales from overseas markets by 2020.

“Trumpchi’s success in China is giving them confidence to march into the US market,” said Fu Yuwu, president of the Society of Automotive Engineers of China.

“Chinese automakers haven’t done enough to become global companies and they won’t have better understanding of markets overseas unless they actually sell cars there.”

GAC is planning to unveil three new cars at the 2017 Detroit show, one of which will be a rugged-looking SUV called the GS7.

This will be the third time GAC is presenting at the show, though it will be the first time the automaker – or any Chinese automaker for that matter – will have a stand on the main floor, said officials.