Chinese Cars

The Detroit News reports that Malcolm Bricklin, the entrepreneur who brought Subaru and the Yugo to the US, has signed the first-ever deal to import Chinese cars to the US.
Bricklin’s new company, Visionary Vehicles LLC, backed by Allen & Co., is working with Chery Automobile Co. The deal will be announced formally at the upcoming Detroit auto show.
"The plan is to import up to 250,000 Chinese-made cars annually beginning in 2007.
The sale of the first Chinese vehicles to American consumers will be a watershed event both in the United States, where Asian automakers have been steadily taking market share from Detroit's Big Three, and in China, where hard-charging manufacturers like Chery are eager to expand globally.
Bricklin said that privately held Visionary Vehicles has committed to invest $200 million in the new product program at Chery—China’s eighth-biggest automaker—for the U.S. market. [...]
While Bricklin is chief executive officer of Visionary Vehicles, its management board is chaired by William vanden Heuvel, a senior advisor to Allen & Co. and former deputy U.S. representative to the United Nations.
In a recent interview with The News, vanden Heuvel compared the potential of bringing Chinese cars to the United States to the entrance of Japanese automakers into the American market more than 30 years ago.
“We think the opportunity is huge to be the first to go to market,” vanden Heuvel said. “It’s exactly the situation that Japan was in starting out.” [...]
“What I do best is import cars, and this is the most incredible opportunity in the car business,” [Bricklin] said. “I’d like to look at it as being the next Toyota.”
Bricklin said that Chery has engaged the Italian design houses Pininfarina and Bertone to design its U.S. models, and has contracted with the Austrian engineering firm AVL to develop new engines. [...]
Bricklin expects the automotive world to be skeptical of Chinese imports in the United States, just as it was when he brought in Subarus and Yugos. But with the signing of the Chery agreement, the aging automotive impresario believes he can make history.
“You know, if we don’t make sure these cars are among the best in the world, we’re going to get our ass handed to us,” he said. “But if we do what we’re supposed to do, this could be the deal that changes the industry.”
As the article points out, if not Bricklin, then someone else would do this. Despite the many challenges, the design and engine firms are clearly top-flight. The interesting question—and opportunity for the new venture—is whether or not it will compete solely on price, or whether it can carve out a distinctive product position, as Toyota and Honda did with hybrids.