DETROIT -- Chinese-designed cars that are assembled in Mexico could be sold in the United States within five years, and Canada before then, industry veteran Kathleen Ligocki said today at the Automotive News World Congress.
In August, Ligocki, 52, was named CEO of GS Motors, the automotive arm of Grupo Salinas, a Mexico City conglomerate.
GS Motors plans to produce Chinese-designed cars at a plant being built in Michoacan, Mexico, with Chinas First Auto Works. Starting in 2010, the plant will assemble cars with an ultimate annual capacity of 100,000 units.
GS Motors sold three imported Chinese subcompact models in Mexico in 2008, a total of 4,000 units. Sales will be expanded in Latin America, then to Canada and ultimately to the United States, Ligocki said. GS Motors marks the first volume launch of Chinese vehicles in North America, she said.
I think the product will be ready for the U.S. market within five years, Ligocki said.
The company is using a hub-and-spoke retail network that includes 20 agencies -- company-owned dealerships -- and mini agencies in Grupo Salina Elektra retail stores. The Elektra stores are big-box retailers similar to Walmart stores in the United States. There are about 300 Elektra retail sites, she said.
The company is using a hub-and-spokes retail network that includes 20 agencies -- company-owned dealerships -- and mini-agencies in Grupo Salinas Elektra retail stores. There are about 300 Elektra retail sites, she said.
We will see a lot of experimentation in other markets, Ligocki said. I think the big-box retailers here will figure it out.
GS Motors surveys indicate that women like the idea of buying a car in an Elektra store, a retail environment with which they are familiar, while men prefer the agency route, Ligocki said. She believes this experimental hub-and-spokes retail sales strategy will work in emerging markets and Europe, and ultimately in the United States.
Theres certainly a lot of risk trying to start a business like this, Ligocki said. Things like this, where you have two strong market partners married together with a very innovative approach, these are the next changes that will rock the automotive world.
GS Motors and its Chinese partner need time to learn more about the United States and its consumers, she said.
It gives them a couple of years" to meet U.S. vehicle regulations, and customer demands regarding "fit and finish on the product, Ligocki said. Its the right strategy for them for the Americas, to start in a place like Mexico.
GS Motors will launch the FAW brand in Mexico this year, she said. The F1 hatchback, the entry-level car, sells for under $5,500. FAWs most expensive car, the F5 sedan, sells for less than $9,000, she said.
Before moving to GS Motors, Ligocki was CEO of Tower Automotive Inc. She led the supplier through a Chapter 11 restructuring that culminated in a reorganization plan and the sale of the company to Cerberus Capital Management LP.
Ligocki previously held a variety of senior positions at Ford Motor Co., including CEO of Ford of Mexico from 2000 to 2001.