COMMENT: Cars from China? For now, beware

BEIJING -- In the months to come, you are going to hear a lot of promotional chatter about obscure Chinese tractor manufacturers that someday might become the next Toyota.Eager distributors will ask prospective dealers to spend tens of thousands of dollars to acquire franchises that may or may not be worth something. In February, this Chinese carnival will penetrate that capitalist bastion of America's auto industry, the annual convention of the National Automobile Dealers Association. Hebei Zhongxing Automobile Co. will display two cars at the convention in Las Vegas. The U.S. distributor, Chamco Auto, hopes to sign up dealers. Can Hebei Zhongxing deliver the goods? Beats me. The manufacturer appears to be as obscure in China as it is in the States. Caveat emptor, eh?Dealers are going to have a tough time sorting out the players from the pretenders. To its credit, NADA is quietly trying to help. Last week, the organization dispatched two operatives to China to attend the auto show here and scout the automakers.Michael Regan, NADA's vice president of industry affairs, said his organization will not play Fraudbuster. Instead, NADA will gather information on the automakers, then let dealers make their own decisions."Our role is to give dealers the most accurate information possible," Regan said. "But we won't try to make recommendations. We want to let them make the decision, and that's where we'll stay out."Regan said dealers should perform due diligence on any distributor that claims to have a Chinese automaker lined up. Despite breathless media predictions, Chinese automakers are not ready for prime time."Nothing is going to happen overnight," Regan said. "We think it will be a minimum of three to four years before they export to the United States."Regan's fact-finding tour is part of NADA's low-key effort to internationalize itself. The organization is reaching out to dealer groups overseas, and they are responding. Last February, 1,700 foreign dealers attended the NADA convention.Regan hopes to top that next year. He is careful to note that NADA is not about to become a United Nations of dealerships. But it seems that globalization is not empty rhetoric.Someday, Chinese automakers will sell cars in the United States, and NADA wants to be ready. You may e-mail David Sedgwick at dsedgwick@crain.com

COMMENT: Cars from China? For now, beware

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