Riding the China tiger ... again
Ray Allegrezza, Editor in Chief -- Furniture Today, January 24, 2005
I read an interesting story in the Detroit News that should resonate with readers of Furniture/Today. The story touched on what could be the next wave of imports from China, and included complaints of design knockoffs, allegations of unfair manufacturing advantages and the subsequent potential threat to domestic manufacturers.
Sounds a lot like what's going on in our industry, right?
But in this case, the story detailes how veteran car czar Malcom Bricklin and a large investment firm, Allen & Co., recently inked the first deal to bring cars made in China into this country.
There's even a weird tie to furniture, since one of the investment firm's clients is Warren Buffett. Makes me wonder if the next Jordan's will be selling convertibles right next to the convertible sofas.
Anyway, the landmark deal was made between Chery Automobile Co., said to be one of the fastest-growing companies among China's emerging automakers, and Bricklin, who launched Subaru, the Bricklin sports car and first imported the ill-fated Yugo.
Chery made the news about two years ago when GM alleged the Chinese carmaker had copied the Chevy Spark, a hatchback based on GM's Daewoo Matiz. GM called on the Chinese government to intervene, but it took no action against Chery.
Bricklin said he plans to import 250,000 Cherys (sounds like Chevy, only with an "r") beginning in 2007. Assuming the plan works, the Chery brand would be as large as Ford's Mercury brand.
Oh, by the way, Bricklin insists these cars will be priced 30% less than domestic counterparts. Sound familiar? Of course, the jury is still out on whether Chery can build cars that meet the standards of the U.S. market.
Bricklin is smart enough to know that if he doesn't deliver the goods, he will be just another guy stalled out in the breakdown lane. But if he succeeds, he could suddenly find himself in the fast track of the passing lane.
If nothing else, I think this partnership underscores the desire by young-tiger Chinese companies to make their mark in the U.S. market. Whether they produce armoires or autos, they share a host of characteristics: They're aggressive, they've got cash and flash, and they're coming to a town near you, ready or not.
Hang onto your hats. We could be in for a wild ride!
