ZX LANDMARK_crJPG.jpgWith chronic overcapacity back home, it was only a question of time before China's carmakers turned their sights abroad.

ZXAuto China wants to be first to enter the US market and it has struck a deal with US distributor Chamco Auto to sell “stylish high-quality Chinese vehicles” in the US.

Chamco has previously announced it will start selling ZXAuto's pickups and SUVs like the Landmark (pictured) from late 1997 with prices starting at just $13,250.

This latest announcement expands the range of vehicles to includes sedans and crossover vehicles, but these new models will not go into production until late 2008. Capacity is expected to reach 300,000 vehicles a year.

Parsippany, New Jersey, where Chamco is located, makes an unlikely beach-head for this long-expected assault on the US market. Nevertheless, Chamco has an exclusive importation and distribution contract with ZXAuto — better known as Hebei Zhongxing Automobile Company — and says it has already signed up at least 11 dealers covering seven US states.

To produce the SUVs and pickups, ZXAuto China is using an existing assembly plant of the Changchun Chanlin group, which has taken a stake in the venture.

For the next stage, the Changchun government has donated land adjacent to that facility and obtained a loan of a $1bn yuan from China's central government to to fund plant expansion, upgrades and working capital.

ZX Auto China owns 51% of the new JV that will make the expanded product line, with the Changchun government holding the remainder. Changchun is the capital of Jilin province in northeast China and is often described as the “Detroit of China”.

Automotive experts have serious doubts whether Chinese vehicles will be able to make much of an impression with western car buyers because of their poor reputation in areas such as design, safety and environmental credentials. Indeed, most observers believe it will be many years before Chinese cars become a common sight on US roads — see this EngagingChina story.

ZXAuto plans to prove the critics wrong.


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