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Can Chinese Luxury Cars Catch On In America?

Recent Interest By Chinese Automakers In Established Brands Like Volvo, Saab Show Their Global Ambitions; But Will Western Consumers Choose To “Drive Chinese”?

Can BYD crack the American luxury car market? Only time will tell.

Can BYD crack the American luxury car market? Only time will tell.

With well-known auto brands like Sweden’s Volvo and Saab up for sale, Chinese brands Geely, Beijing Automotive and FAW — relative unknowns in the global car market — have been in the news as possible suitors. It is no secret that Chinese automakers have their sights set on the export market, and want to see their vehicles gain popularity on lucrative markets like North America. Here, though, is the largest opportunity as well as the most significant challenge faced by Chinese car brands, a bit of a catch-22: while China is the world’s largest auto market — owing, naturally, to its vast population — Chinese car companies need to develop their luxury fleets and export more in order to turn a substantial profit, but for higher-priced vehicles, Chinese consumers virtually always choose foreign-made automobiles, and Chinese brands are almost completely unknown by luxury car buyers abroad.

At the same time, Chinese carmakers must come up against biases about the perceived quality of their products — fostered, perhaps in a large proportion, by the fact that Chinese brands have absolutely no brand equity abroad, since:

1.) most of these companies are only a few years old, and

2.) reports about Chinese-made vehicles tend to be on the sensationalist side and focus on a quality gap or on perceived “counterfeiting” of car models. While many of the problems faced by Chinese carmakers abroad boil down to sloppy or simply “bad” PR, it is, in some ways, understandable that non-Chinese car buyers know little about Chinese car companies — because many Chinese car buyers don’t know much about them either. Quite simply, they need to work harder to differentiate themselves, pin down strong brand messaging, and really push hard to ensure they conform to all safety and emissions standards — or exceed them.

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