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William Maley

Industry News: Why Automakers Want To Break Into the U.S.

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America. The land of opportunity. Various automakers around the world want to get in on this very lucrative marketplace. But as Automotive News notes, trying to break into the U.S. marketplace is close to mission impossible.

Automakers who don't compete in the U.S. see numbers like "16-million-plus sales volume of new cars and trucks" and "average transaction price of $30,665, according to J.D. Power" and want a piece of this. But the U.S. is an unforgiving place.

"People around the world look at the sales volumes going on here, and they look at the fortunes being made here, and they look at what the outlook is in other parts of the world -- and they want to be here," said Charlie Hughes, owner of the brand-consulting firm Brand Rules.

"But the plain truth is that unless you're coming in with something truly unique, it is just not plausible that you're going to get anywhere in this market."

(Author's note: Also, having a bit of luck isn't a bad thing to have either. -WM)

Hughes isn't wrong. Automotive News says there are 42 automotive brands that sell 283 nameplates in various models and configurations. Trying to get the attention of a consumer, let alone a large number is a difficult task. Just ask Alfa Romeo and Fiat who are currently struggling in the U.S.

One only needs to look at the list of automakers that have packed up left in the past 20 years - Daewoo, Isuzu, and Suzuki. Others haven't even made it to the shore - China's Chery and India's Mahindra.

But that isn't deterring a large number of automakers to give it a shot. Here is the current list of automakers that are currently planning entry to the U.S.

  • PSA Group - parent company of Citroën, DS, and Peugeot - has announced plans for a U.S. launch. But it will be a slow rollout beginning with ride sharing service. The company will also conduct a research project to see if it is viable for them to make a launch.
  • Skoda - a brand under the Volkswagen Group umbrella - is reportedly going to make a decision on whether to come in the U.S. next year.
  • Ssangyong Motor Co., a South Korean builder of crossovers has announced that it will enter the U.S. in 2020
  • Geely Automobile is planning to launch a new brand known as Lynk & Co with the possibility of entering the U.S. No word on a possible date.
  • Alkane Truck Co., a company based in South Carolina plans on building the Dominator, a truck using the chassis of a Brazilian army truck and various components from the U.S. CEO Bob Smith believes this vehicle will fill a niche left by the Hummer H1.

"If all you're going to do is enter this market offering the same thing everyone else is already offering, you might as well save your money. The U.S. auto industry is a very expensive place to do business," said Hughes.

Source: Automotive News (Subscription Required)


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