Will China's BYD Bring the F3DM to the U.S. or will this be Just Another Broken Promise?

When it comes to making cars,China is king. We’re talking the world’s largest car market, with over a hundred individual marques. So why is it that there are virtually zero Chinese car manufactures selling cars in the U.S. aka the world’s other largest car market?

So far, China’s “Big Four” (well, the four most visible to those outside of China) have made and broken promises of bringing their vehicles to the North American market. Brilliance, Chery, Nanjing and Geely have all backed down from their plans to open dealerships and factories stateside. So far, not a single car from China's major automakers has touched down on U.S. soil outside a motor show.

Senior analyst Bill Visnic of Edmunds.com explains why: “This isn’t computers or cellphones, where you just get into a big-box store. You need some dealerships, and those things are tremendous investments of time and resources. [The Chinese] thought it was going to be a lot easier than it was.”

BYD hopes to change all that. China’s sixth largest automaker provided plug-in hybrid cars to the 2008 Beijing Olympics and now plans on bringing that hybrid, the awkwardly , named F3DM to the U.S.A. for Spring 2012. It still could be an uphill challenge, though.

The fallout from the slump in auto sales after the Global Financial Crisis, the government’s bailouts of two of the Big Three, the liquidation of numerous dealerships and the reduction in hybrid sales that came with the sudden drop in fuel prices is still being felt in much of America’s automotive heartland. Add to that the small market share commanded by hybrid and electric vehicles – just 2.2% worldwide according to JD Power – and BYD may be in over their heads already.

AS Mike Omotoso from JD Power explains:

“Because consumers are wary about electric vehicles and their driving range and batteries, they are even more likely to go with more established companies like G.M. and Nissan. The problem with the Chinese car companies is they are trying to run before they walk.”

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Volvo to Cut Down its U.S. Lineup, V50 Among the First to go

With its U.S. sales steadily declining for 7 years now, Volvo has no choice but to radically rethink its strategy. The Swedish automaker is currently offering nine models in the States or about as many as Volkswagen does, but it sold almost five times fewer cars than the Germans in 2010.

Consequently, the Swedish brand, which is now owned by China's Geely, has decided to significantly reduce the number of models in its North American lineup and concentrate on best-selling vehicles in an effort to increase sales.

“Five or six is probably a good number”, said Doug Speck, head of Volvo’s operations in the U.S., in a telephone interview for Bloomberg. “We have to focus on the key segments with significant volume potential”.

Mr. Speck confirmed that the V50 estate is sure to go, although didn’t specify exactly when, saying that dealers will be notified first. The manufacturer hasn’t decided yet which other models will be phased out, but it will definitely keep the S60 sedan and the XC60 and XC90 crossovers, he added.

Volvo will also try to boost sales with more advertising and expects “double-digit” percentage growth in the U.S in 2011.

As for the near future, Mr. Speck said that Volvo will introduce hybrids and all-electric cars, but declined to say if it will bring diesels to America.

Source: Bloomberg

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