Chinese SUV maker Great Wall hopes to drive into US market in 2021
Expansion into world’s second-largest market part of company’s globalisation strategy
Great Wall Motors Company, China’s largest producer of SUVs, aims to enter the United States market in 2021, according to company chairman Wei Jianjun. But the company has no plans to build a plant there amid uncertainty over whether the Trump Administration will raise its currently low import tariff on Chinese cars.
Entering the world’s second-largest car market is part of the company’s globalisation strategy, which also includes sales in some of the more than 60 countries covered by Beijing’s Belt and Road Initiative, through which China is seeking greater trade and investment cooperation.
“We have started market research and product development work in the US, and our plan is to enter the US market in 2021,” Wei said on Monday. “Since the current US import tariff of 2.5 per cent is not high, we may not need to build a plant there to kick off sales.”
Despite his belief that Chinese cars are “not that dissimilar” to those made by US rivals in terms of technology, costs and safety, he said a US entry involved “very high risks”. These included potential legal liabilities, as US consumers have won major compensation from manufacturers found to have sold faulty cars.
Great Wall reported a fall of 52.3 per cent in its net profit – to 5.03 billion yuan (US$801.23 million) – for last year on Friday, 2.9 per cent less than the average estimate of 35 analysts polled by Bloomberg. Its shares closed 3.7 per cent lower at HK$8.17 (US$1.04) in Hong Kong on Monday, but edged up 1.7 per cent to 11.48 yuan in Shanghai.