Chinese Cars Hit the U.S.: Will They Go Boom or Bust?

Thanks to the globalized economy, Americans can purchase items made just about anywhere in the world — from Italian leather coats to Russian caviar to Nicaraguan cigars. One of the biggest exporters of goods to America is China, which ships everything from computers to shoes to toys to U.S. retailers. And now, Americans are able to buy a certain type of Chinese product which they never could before: automobiles.

Earlier this month, officials opened the first American sales center — in Los Angeles’ Century City district — for the Coda, a Chinese-label four-door sedan. The Coda is an all-electric vehicle which will retail for $44,900 in the U.S. It’s not totally manufactured in China; many of its electronics are American-made, and the body and battery are attached to each other at a facility in California.

Though Americans may not be aware of it, China has been a major producer of automobiles for its domestic market for years. In fact, China has one of the fastest-growing markets in the world. One of the reasons it has taken so long for Chinese cars to reach U.S. shores is because automakers in that nation were so busy keeping up with domestic demand that they didn’t need to retool a product to meet America’s stricter safety regulations.

But the 2012 Coda is hoping to make a splash in the U.S. The sedan reportedly takes just six hours to charge (using a 220-volt charger) and can travel up to 150 miles before it runs out of juice. The battery is an atypical lithium iron phosphate composition with 728 cells in the chassis.

So will the Coda be a hit in the U.S.? Or will it follow the path of the Edsel and Yugo?

There are several questions which will have to be answered in order to determine how successful the Coda will be in America.

  1. Is it priced too high? The $44,900 price tag is about $10,000 higher than the all-electric Nissan Leaf and about five grand more than the Chevy Volt. Will that drive away potential customers? Also, how will auto insurance rates for the Coda stack up against its competition?
  2. Is it too dull? The Coda’s appearance won’t raise anyone’s heart rate. It’s clearly a utilitarian, run-of-the-mill sedan which emphasizes function over fashion. Even though it has impressive features (like a 134 horsepower engine and a revolutionary battery design), will its lack of bells and whistles be a hindrance in a competitive American market?
  3. Will Americans balk at buying Chinese? A few decades ago, there was a significant backlash against Japanese-made vehicles among U.S. car buyers, although that sentiment faded over time. Will the same be true for the Chinese-label Coda?
  4. What about dealer support? No matter how well-built a vehicle is, problems will always pop up and it will eventually require repairs. So will Coda succeed in building a network of dealers and service centers across the country to address this issue?
  5. Is the Coda in it for the long haul? The American automotive market has chased away numerous foreign automakers — from Daihatsu to Peugeot to Renault. Plus, U.S. consumers tend to have long memories. Will the Coda face hesitation from Americans who worry that it will be here today, gone tomorrow?

Early orders for the Coda are sluggish, but it hasn’t been advertised much in the U.S. yet. You can bet that auto industry types will be closely watching the progress of the Coda to determine whether Chinese-made cars represent a new trend or a flash in the pan.

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