KUNSHAN, China — Frank Rodriguez, owner of Greenway Automotive Group of Orlando, Fla., doesn't like to gamble. But when his partner, Carl Atkinson, visited China a few years back, he decided to roll the dice on the world's second-largest auto market.
"Carl came back and his eyes were about to explode," Rodriguez says. "We saw the writing on the wall."
Rodriguez was in China a few weeks ago to open Greenway's second full-service dealership, in the Shanghai suburb of Kunshan.
For a foreigner, building a successful dealership in China is daunting. Greenway's apparent success required a combination of factors that would be hard to replicate.
"Transplanting an American operation here is extremely difficult," says Ken Habich, Asia director in Shanghai for consultancy Urban Science of Detroit.
Habich was director of market representation for Ford's joint venture in China when Greenway applied for a dealership. Habich says he was skeptical until he met Yemao Huang.
Huang is CEO of Greenway Asia LLC, which operates the only American-owned Ford dealerships in China. Born in China, Huang had connections here, including his brother, a joint investor who lives in Shanghai. Huang, now an American citizen, also had dealership management experience. "If you don't have a general manager the caliber of Huang, you are going to have a very hard time" in China, Habich says.
Greenway, a 16-dealership group, also had the necessary capital, Habich adds.
Rodriguez calls Greenway's investment in China sizable. After it started in 2004, the operation lost money for the first few years, though it is profitable now, he says. Doing business here is "not for the weak of heart," Rodriguez says.
The China auto market grew 26.7 percent to 3.8 million units in the first nine months of 2007, according to Automotive Resources Asia, a division of J.D. Power and Associates.
But China still has a relatively small number of vehicles in operation. So income from service and parts is small. And Rodriguez admits to worries about the sustainability of China's fast growth.
Still, Greenway continues to expand here. It is building a third full-service dealership near Shanghai, offering sales, service, and spare parts.
Says Rodriguez: "You cannot possibly not get excited about China." c