Chery-Chery Bang-Bang

By Jack R. Nerad

The concept could revolutionize the American auto industry...or it could be a stupendous flop.  As of now, though, there is no talk of failure from Malcolm Bricklin, the man who brought America the Subaru, the Yugo and, of course, the Bricklin.  The veteran auto exec, who first brought Subarus to this country 37 years ago, is poised to lead a new onslaught on the U.S. market on a bigger scale than he has ever attempted, and with the lure of incredibly low prices as his calling card, he is generating a high level of dealer interest for his Chery-brand, Chinese-built line of automobiles.  Bricklin plans to unleash his brand in the U.S. market in January 2007, and his unabashed goal is 250,000 vehicle sales in the first year.  By way of comparison, that's about 60,000 more vehicles than Subaru currently sells annually in the United States after nearly four decades in the market.  In other words it's a tall order.

But Bricklin feels he has the magic bullet in the form of low labor costs.  Initial estimates held that Chery vehicles would retail for as much as 30 percent less than comparable models now on the market, including the low-priced Korean-built vehicles from Hyundai and Kia (and Chevrolet's Daewoo-built Aveo.)  When one looks at the plethora of Chinese-manufactured consumer products on the U.S. store shelves these days, you have to think that maybe Bricklin is onto something. 

The entrepreneur was tantalizing in his press conference at the recent Chicago Auto Show, promising things like a $14,000 V-6-equipped sport utility vehicle, $19,000 seven-passenger, V-8-powered "sport wagon," and $19,000 V-8-powered sports sedan.  Since none of these vehicles is yet developed, much less on sale, speculation about them comes easy.  But Bricklin says his Visionary Vehicles LLC and Chery Automobile Company have engaged topnotch suppliers to make these dreams a reality.  For instance, the new models now under development will be styled by famed Italian coachbuilders Pininfarina and Bertone, while AVL List GmbH is participating in engine design. 

Though 250,000 sales annually in the United States seems to be a high target, Visionary Vehicles has its sights on a million sales in the United States as it matures.  To help the company reach that level, some 14 different vehicle models are said to be in development. 

Bricklin has equally high aspirations for the Chery dealer body.  His plan calls for each of 250 Chery dealers to invest at least $15 million each in what he described as "destination dealerships."  With that kind of investment each of these dealerships should be the automotive equivalent of the Taj Mahal (or should we say the Great Wall of China?), because most auto dealerships cost a fraction of that.  But the big investment might be enticing to car dealers, because sales per store (1,000) are projected to be much higher than the industry average.

Certainly there are huge hurdles to be jumped before any of these dreams will be realized, and Chery is already the subject of some controversy.  General Motors has sued Chery Automobile Company saying the company's QQ minicar model is a blatant rip-off of a Daewoo vehicle GM sells in China.  As of now, though, the outcome of that suit is unresolved.

And of course, the future of Visionary Vehicles is unresolved as well.  Will it flourish like Subaru or flounder like Yugo?  The proof will be in the driving, still some years away.

Driving Today Managing Editor Jack R. Nerad writes frequently on auto industry trends.  He wrote the definitive study of Bricklin's experience with the Yugoslavian-built Zastava in his story "Wherever Yugo There You Are."

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