BUSINESS

Bad news for the Big Three: $13K a pop

JASON KIRBY January 14 2008
BUSINESS

Bad news for the Big Three: $13K a pop

JASON KIRBY January 14 2008

Bad news for the Big Three: $13K a pop

BUSINESS

JASON KIRBY

Last month, Canadian

auto dealers crossed the U.S. border for a series of hush-hush meetings that could have major consequences for the auto sector here. The dealers had been invited by New Jerseybased Chamco Auto to test drive Chinese-made trucks and SUVs it hopes to have in Canada

in about a year. There was only one problem. “Canada is a little bit goofy in terms of bringing in cars that aren’t yet certified,” says Chamco chairman Bill Pollack. So the dealers had to cross into the U.S. near Montreal, Niagara Falls, N.Y., and Vancouver to see them.

Chamco, which also hopes to market the vehicles in the U.S., wants to start with 50 dealerships in Canada for its two models of trucks and SUVs. The vehicles are made by Hebei Zhongxing Automobile Company, near Beijing, and will have a suggested retail price of just US$13,500. Pollack says he’s trying to enlist up to three distributors to handle the rollout of Chamco’s dealership network in Canada. Each dealer must pony up $100,000 for “membership units” in a Canadian subsidiary. Pollack says the dealership network will be announced in about three months, and that the vehicles will be compliant with Canadian standards within nine.

If successful, Chamco poses a threat to not only the Big Three, but also Japanese and Korean manufacturers. In its brochure, Chamco brags that its Chinese manufacturing workers earn just US$1,300 a year, allowing it to sell for so cheap. But there’s a big question whether Chinese-designed and built cars can ever meet tough Canadian and U.S. safety and fuel efficiency standards. Chamco isn’t the first to try. A couple of years ago Malcolm Bricklin, best known for his failed effort to build a sports car with gull-wing doors in New Brunswick, made a splash with plans to import Chinese-made cars from Chery Automotive. The cars never met U.S. standards, and Chery eventually walked away, leaving Bricklin to face angry dealers. M