China's GAC sets U.S. launch for '19, will recruit dealers at NADA convention

Editor's note: The number of GS8s sold in China last year has been corrected.

DETROIT -- After years of teases and promises, China's Guangzhou Automotive Group announced firm plans to enter the U.S. market -- and it plans to recruit dealers at the upcoming NADA convention.

The state-owned automaker said Monday that it will launch sales of the GS8 -- a seven-seat SUV -- in 2019.

"We will attend the NADA convention, company President Yu Jun told reporters, "in preparation for entering the North American market in the fourth quarter of 2019."

A spokesman for the National Automobile Dealers Association on Monday confirmed GAC will display at its annual convention, which will take place in March in Las Vegas.

Yu said GAC will launch a North American sales company in the first half of this year.

“We will explore all sorts of channels, including partnering” with other dealership groups, he said. “We will also try to build our own dealership network in the future. All of these options are on the table.”

GAC has publicly indicated its intention to enter the U.S. market as far back as 2014. It has taken a number of steps to prepare for the move.

The automaker has opened a technical center in Silicon Valley, and it plans to open a second facility in metro Detroit. The next step, according to Wang Qui Jing, chief of GAC’s engineering institute, is to establish a design studio in Los Angeles.

GAC also pulled off a splashy product placement of the Trumpchi GS5 in the movie "Transformers: Age of Extinction." 

Winning streak

GAC is on a winning streak in its home market in China. Last year, the company sold 508,000 vehicles, up 37 percent.

Michael Dunne, president of Dunne Automotive Ltd. and an adviser to GAC, says the automaker has closely studied the U.S. market.

"They've been doing preparation on the ground, talking to consumers," Dunne said. "They've been running clinics to find out what consumers care about. This is the real deal."

GAC's first U.S. product, the GS8, already is on sale in China. The seven-seater is powered by a 2.0-liter engine mated to a six-speed automatic transmission. The powertrain generates 198 hp and 236 pound-feet of torque. More than 100,000 GS8s were sold in China last year.

There are, however, some unanswered questions. The Trumpchi brand might prove problematic in the U.S., and company executives have said they may launch a new brand, instead.

Also, GAC must demonstrate that its vehicle quality is U.S.-grade. The company likely will note that J.D. Power’s Initial Quality study has ranked GAC the top-scoring Chinese automaker for the past five years.

The company considers its quality good enough to market the Trumpchi brand in 14 countries. But the U.S. would be the toughest export market of all, Yu acknowledged.

“The U.S. market has the most restrictive rules and the fiercest competition,” he said. “Therefore, entering the U.S. market is a great opportunity for us to challenge ourselves in order to become a world class brand.”