Which Chinese Automaker Will Be First To Plant Its Flag On U.S. Soil?

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Zotye showed the T600 compact SUV at the recent Shanghai auto show and plans to offer it in the U.S. in late 2020 or early 2021. It has a 1.6-liter turbocharged I-4 gas engine and a six-speed automatic transmission. The T600 will be followed by the next-generation T700 midsize SUV a year later and then a full-size, three-row SUV a year after that, likely called the T900, said Duke Hale, CEO of HAAH as well as Zotye USA. They would have gasoline engines, but electric vehicles could be added in the future. In China Zotye has four sedans, one of which is electric, and five SUVs. Zotye is also building a joint venture plant with Ford to make electric EVs for the China market.

Hale—who is a veteran of Isuzu, Lotus, Volvo, Mazda, and Jaguar Land Rover—knows the value of being a first mover if done right. He's taking some pages from the Hyundai playbook to help get its footing in North America. Zotye vehicles will be well equipped but priced 20 percent below the competition so they are priced below a used car.

Like the Saturn model, there will be one price, so no haggling. There will be two higher-end trim levels and five colors to choose from. To assuage quality fears, the brand will also follow the Hyundai model of offering the most comprehensive coverage in the industry, Hale vows. And he is spitballing other ideas such as four free tires at the three-year mark. Hale said Zotye could withstand 10-15 percent tariffs but hopes that is not the case. Either way, "it won't stop us from coming to market." Zotye has excess capacity: It builds about 400,000 vehicles annually in China but has capacity to assemble 1 million.

The dealership commitment is minimal, with no showrooms needed initially. Zotyes can be sold alongside another brand or in a temporary structure. Hale says he has 22 dealers with 60 sales points so far in 15 states with the expectation of about 120 dealers with 300 sales outlets by the end of 2020. Dunne says Chinese companies entering the U.S. need to be low-price, like Zotye, requiring minimal investment, or high-end premium vehicles like Nio's proposed $65,000 7-passenger SUV that takes on Tesla. Nothing in between, says Dunne. Success will rely on a volume strategy or premium brand positioning. Read more...
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