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Chinese SUV Headed for U.S. Via Mexico

By Joe Benton
ConsumerAffairs.com

June 13, 2007
A Chinese automaker will begin exporting pickups and SUVs to Mexico this year as part of a strategy to sell the vehicles in the U.S.

The ZhongXing Admiral

The Chinese SUVs will sell for a little over $12,000 in Mexico and are likely to be the first Chinese vehicles to sell in U.S. showrooms, according to Bill Pollack who is chairman of New Jersey-based Chamco Auto.

Pollack said Mexico will allow China's Zhongxing Automobile to export 50,000 vehicles duty-free to the country this year.

Assembling the Zhongxing vehicles in Tijuana will make them Mexican under North American free trade rules, so they can be exported to the United States duty-free, according to Pollack.

Pollack said he expects to sell as many as 20,000 vehicles in Mexico in the first year and have the Tijuana plant supplying U.S. consumers within two years.

Like most other Chinese imports, the Zhongxing vehicles will sell for less money than domestic vehicles.

"Our plan is to average 20 percent below comparably equipped brand-name competitors," Pollack said.

China's car industry is growing quickly and hopes to break into the lucrative North American market soon.

Zhongxing is among a handful of new Chinese automakers, including Great Wall Motor Co. Ltd., Geely Automobile Holdings Ltd. and Chery Automobile.

Mexico is already a major auto manufacturer, with Nissan Motor Co. Ltd., Ford Motor Co., Volkswagen AG and others exporting roughly 1.5 million cars and trucks to the U.S. last year.

In the 1990s, Mexico attracted a wave of foreign manufacturers to Tijuana and other cities along the U.S. border after it joined the North American Free Trade Agreement.

Zhongxing sells almost 33 percent of its vehicles to customers in developing nations.

The automaker meets European and Mexican safety and emissions standards and vehicles produced in Mexico will be adapted to U.S. regulations.

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