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North American motorists have gotten used to paying $20-$25,000 or more for their new vehicles. Long gone are the days when sub $10,000 cars ruled the highways, with few cars available for under $15,000 these days. All of that will be changing as the pending introduction of cheap cars from China as well as imports from Mexico and other third world nations will reshape the automotive landscape. Will you buy one of these bargain brands or will you stick with one of the trusted names? Let’s step forward a few years to look at a radically changed automotive market and just what it may have to offer to you, the value conscious consumer.

If you follow automotive press reports then likely you have heard talk of cheaply priced cars from China being imported to the US and Canadian markets. At prices reported to be as low as US$ 6500, these cars have created a lot of buzz and have raised concern about the entire automotive industry, domestic and foreign. One big question asked includes this: how will domestic manufacturers be able to compete price wise? Well, prices won’t be quite as low as first reported once certain safety and anti-pollution measures are added in; instead the final starting price will likely be in the neighborhood of US$ 8500.

Regardless of exactly where the final starting prices are set, an economic tsunami could hit in short order.

Two of China’s top brands, Chery and Geely, are reportedly preparing to export cars to the US in 2008. Both manufacturers produce several lines of vehicles, but current manufacturing output is limited. Expect no more than 200,000 of these vehicles for the first few years, but maybe millions more once additional capacity has been brought online.

In India, several manufacturers have been quietly expanding capacity to serve the burgeoning Indian market. One manufacturer, Tata Motors, even has pledged to build a car starting at US$ 2000. That’s no typo - two thousand dollars for a new car! The last car that sold at this price in the US was the VW Beetle. Of course, you have to go back to the late 1960s to find a new Beetle at that price.

Will Tata and other Indian automakers export their cars to the U.S.? Given the current state of the Indian auto industry, likely this will not happen for some time. Capacity is expanding, but it is barely keeping up with domestic demand. Plus, each model would have to undergo extensive upgrades in order to conform to strict U.S. emissions, safety, and quality standards. Yet, the possibility of a car that will greatly undercut Chinese models in price is intriguing.

Don’t think for a moment that leading world automakers will take these challenges lying down. Ford is proposing to build a sub-$10,000 vehicle in Mexico; GM is tapping its South Korean arm Daewoo for additional low cost models; and DaimlerChrysler is shopping around for a partner to help build it own super cheap people mover for around the same price.

Toyota, Honda, and several other Asian manufacturers will be sure to respond. With factories scattered across the globe, each company can pull a model from one factory and ship it to the U.S. to compete. Already, Honda and Toyota are offering cars at around $12,000 or less and each of these models could retail for much less if they are built in countries where wage levels are very low.

So, what does all of this mean for consumers? Well, you aren’t likely to see an across the board drop in automobile prices, but you probably will see the end to “sticker shock” the phenomenon that has stunned new car buyers for the past generation. What you may find is this: $60,000 Lexus‘ and $6000 Scions being sold side by side. A huge difference in price, but something that the North American auto enthusiast may find to be commonplace.

Copyright 2006 - Matt Keegan is a freelance automotive writer covering the classics, new models, and industry trends. You can maintain your car - domestic or foreign — with the help of high quality auto parts from Crane, Painless, and Taylor Cable.

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China is laying plans at this very moment to begin shipment of passenger vehicles to the North American market by mid 2007. Chinese automobile manufacturer, Chery, yes read that again… the company sounds strangely like Chevy, is looking at bringing not just one, but a whole fleet of low cost production vehicles to our shores. Proposed prices will astound you and could potentially bring the U.S. auto market to its knees. Don’t think for even one moment that Japanese and Korean automakers will be immune from this flood of low cost cars. Chery vehicles have been designed - some say stolen - from current Asian models and will compete directly against the likes of Toyota, Honda, Nissan, and Hyundai. China’s long awaited war with the US - at one time expected to begin with a Red Army attack on Taiwan — may be fought on an economic front instead.

Chery, a state-owned car producer formed in China’s eastern Anhui Province, is currently building a number of cars in China including the QQ - a compact car strangely similar to the Daewoo Spark [GM’ Korean division], as well as several sedans and a compact SUV. Indeed, recent charges made by Toyota, GM, and Honda have all alleged that Chery mimicked or outright stole designs from at least one of each automaker’s vehicles including the Honda CR-V. For the record, the Toyota case was rejected, Honda is still attempting to work out a solution with their case, and GM recently dropped its suit after the Chinese automaker agreed not to sell their cars in the US under the Chery name which GM has stated is too close to the Chevy name. Chinese courts have also ruled that the Daewoo Spark design was not registered in China, so GM dropped its suit.

At present, the Chery vehicle line up includes the tiny QQ; a compact SUV built jointly with Mitsubishi called the Tiggo; and three sedans: the Oriental Son, the Flagcloud, and the Windcloud. Recently, Chery unveiled a newly designed crossover vehicle along the lines of the Chrysler Pacifica. With an introductory MSRP of under $20,000 the Chery crossover will seat up to seven passengers and come equipped with both four and six cylinder engines. As you might guess the Chery crossover, if equipped similarly to the Pacifica, could be priced some ten thousand dollars less than the Chrysler model.

Current prices on the other models have not yet been set, but published reports this past summer indicated that a basic Chery could retail for as low as $6995 in the US, which would be some three thousand dollars less than the next lowest priced car, the Chevy Aveo [from GM’s Daewoo unit, naturally]. Of course, this particular pricing strategy has raised all sorts of alarms within the automobile industry, chiefly how to counter a flood of low cost cars invading the U.S. market. As some have pointed out, much like Hyundai’s introduction to the North America market during the 1980s, the Chinese cars are expected to initially have only a limited appeal primarily due to expected low quality levels. Still, it only took Hyundai less than one decade to begin to produce cars which consistently matched the quality levels of many American and Asian models. So, it could be just a matter of a few years before Chinese cars receive the positive press now given to many other Asian automakers, resulting in a sharp surge in sales.

While the Chery dealer network within the US has yet to be established, it is under development; a limited version of the dealer network is expected to be in place by Summer 2007 when the first Chinese vehicles arrive. A rapid expansion of this same network across the US and Canada has been planned over the ensuing years and although the Chery name will not be used in the US, you can expect that whatever name is selected these cars will impact the way many Americans buy their cars from that point forward. Oh, by the way, two other Chinese automakers — Shuanghuan Automobile Manufacturing, LTD and Geely Automotive — are also expected to export cars to the North American market soon after Chery makes its debut.

While it is too early to say, the opening of the lucrative North American automobile market to cheap Chinese vehicles could possibly shake the American economy in ways never anticipated. I, for one, shudder to think just how all of this might unfold.

Copyright 2005 — Matthew Keegan is The Article Writer who writes on a variety of topics including: advocacy, automobiles, aviation, business, Christian themes, family, news, product reviews, travel, writing, and more. Samples from his portfolio are available right online.

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News reports over the past several months have featured the coming “invasion” of Chinese cars to the North American market. What has gotten the attention of many car buffs is the very low prices at which each model will be sold. Prices as low as $6600 have been quoted for one model with a handful of other models also expected to retail for well under $10,000. If Chinese cars do arrive as expected, look for a massive change in the way entry level model cars are built and sold in the U.S. and Canada. Consumers stand to gain with the increased competition, although exactly what they will be getting for the price is not yet known.

The Chevrolet Aveo, a compact car built by GM’s Korean unit, Daewoo, is currently the lowest priced car sold in the U.S. retailing for as low as $9300 after all discounts have been applied [MSRP is currently set at $9890 for the “Special Value” models]. A 16 valve 1.6L I4 mated to a 5 speed transmission is standard and Chevy kicks in an AM/FM radio for good measure. Beyond that, the car is truly stripped.

On the other hand, two Chinese automakers are preparing to enter the U.S. market, likely as soon as summer 2007. Selling 2008 model year cars, both the Geely Automobile Company and the Chery Automobile Company are working with U.S. representatives to build nationwide dealer networks. Chery, which will have to change its name after losing to General Motors in a court decision over their name [too close to Chevy], has a model currently called the “QQ” based on the Daewoo Spark which they would like to bring to the U.S. Along with as many as four other models, the cars will range in price from just under $7,000 to as high as $20,000. Geely has similarly priced cars that they plan on marketing too.

So, what does this mean to the market? Plenty. Besides the Aveo, numerous other small cars are marketed in the U.S. including Toyota’s Scion brand, the Honda Fit, Nissan Versa, Saturn ION, and offerings from Kia and Hyundai. Some of these vehicles come better equipped than the base Aveo, but for the most part comparably equipped entry level models with air conditioning are each retailing for about $12,000.

Even after air conditioning and certain safety measures [like air bags and better fenders] are added to entry level Chinese vehicles, it is expected that comparably equipped Geely and Chery models will still retail for between $8-8500. This translates into a price drop of as much as 30% compared to competing models.

Naturally, the quality of Chinese cars may be a big concern. Not noted for building much of anything that is of superb quality China, much like Japan of more than 40 years ago, must bring quality levels up. Still, for even $1000 more per vehicle an extended warranty similar to the 100,000 mile warranty offered by Hyundai and Kia could allay consumer’s concerns. Simply add the cost of the warranty to the price and a $9000 fully warranted Geely could be very attractive.

So, how will competing manufacturers react? By dropping their prices accordingly. Look for specially equipped Scions, Kias, and Hyundais to appear in U.S. showrooms priced below $10,000. Soon, look for Mexican built Scion fighters from Ford and Dodge also to show up and be sold at unthinkably low prices. By 2010, the base price for many entry level models in the U.S. will be below $10,000; if they are not priced accordingly then they many not sell.

Long term, prices across the board for all vehicles may begin to drop, especially as Chinese manufacturers start to market vehicles that are larger and better equipped than base models. Mentioned earlier was a vehicle in the $20,000 range. This particular Chery model strongly resembles the Chrysler Pacifica and could be imported to compete against it and other crossover vehicles.

Naturally, the effect on the U.S. manufacturing industry could be devastating and not just to GM, Ford, and DaimlerChrysler. Toyota, Honda, Nissan, and Hyundai all build cars here. Will they compete in price or will consumers see the sharp differences in quality and stick with the trusted brands?

A revolution is coming to the auto industry — one which is certain to completely redefine the market.

Copyright 2006 - Matt Keegan is The Auto Writer covering a wide variety of topics including industry trends, new models, replacement automobile parts, accessories, and more. You can get OEM quality Discount Auto Parts right online.

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