Chinese Brands Replacing U.S., Japanese at Auto Shows

Posted: November 26, 2008

The Detroit Auto Show is usually the biggest date on the calendar for U.S. automakers.  Historically, the Big Three show off their latest products, their most advanced technologies, and their wildest ideas for future designs in their own back yard.  Their Japanese counterparts traditionally put on quite a show in Detroit as well.  But this year, with American automakers facing a financial crisis and begging the government to help them survive, they're cutting back their presence in the Detroit show.  Japanese brands, caught in the same market downturn, are dialing back their displays as well.

So what will be featured in the Big Three's back yard for the 2009 Detroit Auto Show?

Chinese cars.

The exodus of major automakers from auto shows in the U.S. has created an opportunity for Chinese brands looking to move into the U.S. market. 

Bloomberg reports, "Gloom hangs over preparations for the 21st annual North American International Auto Show in January as GM, Chrysler and Ford Motor Co. struggle to survive, industry sales plunge and eight overseas carmakers cancel or limit their role in the main U.S. forum for promoting new models."  GM, Ford and Chrysler have all scaled back their plans for the show.  Other automakers won't be coming at all.  "Nissan Motor Co., Japan's third-largest automaker, stunned organizers this week by saying it would skip the show to save cash. Honda Motor Co., No. 2 in Japan, said yesterday it would forgo "traditional" press conferences for its vehicles."

Porsche, Suzuki, Land Rover, Ferrari, Mitsubishi and Rolls Royce had already announced they wouldn't be attending.

But Autoblog reports, "Chinese automakers will be the direct beneficiary of everyone's lack of interest in Detroit, as both BYD Auto and Brilliance will be moved out of the basement, otherwise known as Michigan Hall, and onto the main floor...for the first time"  The two will "be occupying the space formerly reserved for Mitsubishi and be positioned elbow-to-elbow with mainstream manufacturers that actually do sell cars in the U.S."

The companies are on the rise globally.  The Examiner adds, "Brilliance now sells cars in Europe...and in China, Brilliance builds the 3 Series and 5 Series for BMW for the domestic China market. A subsidiary builds Toyota models for sale in China."  BYD "is no stranger to export but as a major battery manufacturer. BYD claims one quarter of the world's cell phones are powered by its batteries, and BYD plans to leverage that expertise into building hybrid and electric automobiles." The company currently "has facilities to produce 300,000 cars annually."

Let's be clear - neither of these companies currently has any plans to sell cars in the U.S. market.  But they clearly want to raise their media profile here, and with the Big Three teetering on the brink of collapse, perhaps these companies see an opportunity in America.  Over the next few months, the GM, Ford or Chrysler were to fail, it's possible that a bankruptcy court could oversee the sale of factories, showrooms - even the trademarks on iconic vehicle names.  Successful foreign automakers with money and an interest in the U.S. market might have a unique opportunity to buy their way in.  We may look back on the showfloor of the 2009 Detroit Auto Show, when BYD and Brilliance took over for Nissan and Mitsubishi, as a sign of what was coming.

While the industry cuts expenses wherever it can, automakers are trying to sell cars as fast as possible with deep discounts.  Research the best car deals for November with U.S. News' car rankings and reviews.