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Chinese Carmakers Not Planning Mass U.S. Sales

May 25, 2007

DEARBORN, MICHIGAN— Chinese automakers aren't likely to start selling Chinese-made vehicles in the United States on a mass scale anytime soon, China's vice minister of commerce said Monday during a visit to the Detroit area.

Ma Xiuhong, in town promoting Chinese-U.S. trade and alliances with the auto industry, said Chinese car companies are too consumed with the ultra-fast growth in their homeland to focus on selling cars to Americans.

The hurdles involved in creating a dealer network, setting up financing operations and building infrastructure make it unlikely that Americans will see Chinese vehicles in the near future, she said.

"I don't believe now is the right time for Chinese auto producers to export large numbers of vehicles into the United States," Xiuhong said in an interview after a speech to the Detroit Chinese Business Association. "Automobiles are a special kind of product. Going to market requires a more complicated and sophisticated approach than in any other industry."

The Chinese are building their auto industry with an eye toward joining the Japanese and South Koreans as big exporters to the United States, which remains the world's most profitable auto market.

Earlier this year, DaimlerChrysler AG's Chrysler Group announced plans to bring subcompacts built by China's Chery Automobile Co. to North America and other markets. Most analysts, however, say the Chinese still have a long way to go before they are capable of producing vehicles that can compete globally and in the hyper-competitive U.S. market.

Several executives from Detroit's automakers were on hand Wednesday for a ceremony in which U.S. companies signed trade agreements with Chinese officials.

"The opening of China's doors has created benefits that would (previously) have been unimaginable," said Ken Cole, GM vice president of global public policy.

General Motors Corp., which has a number of joint ventures in China, is exporting $700 million in automobiles and components to China. GM's China operations have been a reliable source of income for the automaker, turning a profit every year since 2001.

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