Trade war delays Chinese automaker GAC’s entry into US

PTI Detroit | Updated on January 15, 2019 Published on January 15, 2019

Analysts predict rapid contraction in the auto industry should more tariffs take effect

Chinese auto maker GAC will delay its entry into the United States (US) market until 2020 because of the trade war between Beijing and Washington, a company executive said Monday at the Detroit auto show.

“We originally had the plan to launch our first vehicle in the US at the end of 2019. However we have postponed our plans due to the recent development on trade. We’re making steady progress towards it,” GAC President Yu Jun said through a company interpreter.

GAC now planned to launch its first product in the US in the first half of 2020, Yu said.

Beijing and Washington remained locked in a trade war that could escalate as soon as next month, when the Commerce Department is expected to deliver a report on possible new auto tariffs.

Analysts predict rapid contraction in the auto industry should more tariffs take effect.

“Tariffs would be devastating to the entire industry,” said Robert Carter, chief of Toyota’s North American sales, adding that vehicle prices would increase and suppress sales.

Cox Automotive chief analyst Jonathan Smoke said 47 per cent of the vehicles sold in the United States in 2018 were imported.

“Tariffs already had an impact in 2018,” he said. “We believe about two per cent of today’s prices are because of the tariffs that were already implemented.”

The average price of a car in the US was $36,000 in 2018, up more than three per cent from the previous year.

The privately-held GAC Group, which is participating in its fifth Detroit show, said it will open its third US research and development center on Tuesday in Detroit.

Published on January 15, 2019
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