For years, American consumers have been wondering just when they would witness the arrival of ultra-low-priced Chinese cars.
Turns out, maybe never.
Chinese automakers aim to compete in America — but not on price as the Japanese and Koreans did. Instead, they will market quality vehicles with above-average stickers.
“We don’t have the patience of the Japanese and Koreans,” a supply chain director at a Chinese start-up automaker told me. “They took too long [to build their reputation] in the U.S.”
First among these Chinese challengers will be Lynk & CO. The 6-month-old company plans to enter the U.S. market in 2018, starting in California.
To give the brand a global image, Geely chose a decidedly un-Chinese name. Lynk & CO also is meant to reflect the firm’s closer connection to digital screens and mobility than to a manufactured product.
(And because you’re curious: Company executives insist that Lynk & CO is not an approximation of a certain Detroit luxury brand.)
Lynk & CO’s plans for the U.S. give evidence to a larger trend: Chinese companies are attacking the U.S car market at the high end.
Some examples: Faraday Future, Lucid Motors, Karma Motors and NIO — all Chinese-funded — are developing premium electric (and sometimes autonomous) vehicles in California to blow past Tesla. Prices will be $100,000 and up.
But doesn’t a low-price strategy still seem to be a better match for the notoriously low-cost Chinese manufacturers?
That was yesterday. Today, it is no longer cheap for Chinese factories to employ Mr. Wu and Ms. Li. Says Shaun Rein, author of The End of Cheap China: “Labor costs and real estate costs are soaring, which is actually making it more expensive to produce in China.”
Coastal labor in China now is more expensive than in Mexico and Brazil.
Of course, Lynk & CO will not be the first made-in-China car on American streets. The $37,000 Volvo S60 arrived first in 2015, followed shortly by the $44,000 Buick Envision.
Who could have imagined a day when Americans would be paying $40,000 for China-built vehicles? Well, here we are.
Apologies, American discount shoppers. Lynk & CO is the new — if unanticipated — face of China’s auto industry going global.
The article “The cheap Chinese cars aren’t coming” originally appeared on autonews.com
Lynk & CO aims to succeed in America by acting like a global mobility company.
Consumers will have the option to order Lynk & CO cars through a subscription model, and they can share the vehicle with others by using an app on a smartphone. Lynk & CO products will be sold directly online and through company-owned stores.
But wait, not so fast, where did Lynk & CO come from? What about product quality? And how about that name?
Let’s go back to 2010. China’s Geely Automotive buys Volvo and quickly sets up a tech center in Gothenberg, Sweden. Some 1,700 European and Chinese engineers swear allegiance to a secret mission: Build a vehicle that blends Volvo design strengths with highly competitive Chinese engineering costs.
Last October, I attended the Lynk & CO global brand launch event in Berlin to see the product firsthand.
Lynk & CO’s first model, the 01 crossover, was developed from Volvo’s compact modular architecture. Presto: With the 01 model, you get a Volvo V40 in a more affordable package. This is precisely the same shared platform strategy pursued so successfully by Volkswagen and Audi.