FORBES: Taking A Page From Japan’s Playbook, China Will Build Cars In The US

07/06/2015

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BY: Michael Moran| 07/06/2015 8:32 am | Source: Forbes

Taking a Page From Japan’s Playbook, China Will Build Cars In the US

NEW YORK – With relatively little fanfare and amid the debate over a US-led trans-Pacific trade accord that would leave China on the sidelines, a Chinese company has announced a plan to build an auto plant in Berkeley County, South Carolina – the first ever instance of a major Chinese manufacturer creating jobs inside the United States.

One reason the $500 million investment in a rural area of a region with relatively high unemployment rates may have gone unnoticed is brand confusion: The cars to be built at the new plant will be Volvos, the quintessential symbol of Swedish industrial prowess – and American yuppiedom.

Volvo, like many other great industrial giants, fell on hard times during the 2009 global financial implosion and after a flirtation with insolvency was purchased at a huge discount by Zhejiang Geely Holdings of China, a private industrial conglomerate based in the gritty industrial city of Taizhao.

Geely sells about a half million cars a year mostly in the domestic Chinese market. While company has said none of its native Chinese models would be built or assembled in the South Carolina plant, if history is any guide, it is only a matter of time before that changes.

Geely, perhaps more than any other Chinese auto company, is globally ambitious, and a growing percentage of its cars and trucks were exported to the Eastern European and Asian markets last year. In 2013, it purchased Manganese Bronze Holdings, makers of London’s iconic black cabs, which are now built in Shanghai and assembled in the UK. And it owns Drivetrain Systems International, an Australian company that is a leading manufacturer of transmissions.

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