In mid-2007, Chinese automaker Chery began shipping passenger vehicles to North America, introducing a fleet of low-cost options that shook the U.S. auto market. With proposed prices significantly lower than competitors, Chery aimed to challenge established players like Toyota, Honda, Nissan, and Hyundai. Chery’s entry signaled a potential economic shift, turning a once-anticipated military conflict into an economic competition.
Chery, a state-owned company based in Anhui Province, produces various models, including the QQ, a compact car resembling the Daewoo Spark, as well as sedans and a compact SUV. Design disputes arose with Toyota, GM, and Honda, who alleged that Chery copied their vehicle designs. While Toyota’s case was dismissed, Honda pursued a solution, and GM dropped its suit after Chery agreed not to use the Chery name in the U.S., due to its similarity to Chevy.
Chery’s lineup includes the QQ, the Tiggo SUV co-developed with Mitsubishi, and sedans like the Oriental Son, Flagcloud, and Windcloud. The company also introduced a crossover vehicle similar to the Chrysler Pacifica, priced under $20,000. This crossover could accommodate up to seven passengers and feature both four- and six-cylinder engines, potentially costing $10,000 less than the Pacifica.
Reports suggested a basic Chery model could retail for as low as $6,995 in the U.S., undercutting the Chevy Aveo. This pricing strategy raised concerns within the auto industry about how to compete with a flood of low-cost imports. Similar to Hyundai’s introduction in the 1980s, initial perceptions of lower quality were expected. However, Hyundai quickly improved, matching the quality of American and Asian models within a decade, suggesting a similar potential trajectory for Chinese automakers.
While Chery developed its U.S. dealer network, with a limited version planned for Summer 2007, a broader expansion across the U.S. and Canada was anticipated. Although the Chery name was not used in the U.S., the cars were expected to significantly influence American car buying habits. Other Chinese automakers, Shuanghuan and Geely, were also planning to export to North America.
The introduction of affordable Chinese vehicles into the North American market had the potential to reshape the American economy. The long-term consequences of this shift remain to be seen.