Will the U.S. say yes to a 'Made in China' car?

Story highlights

  • Volvo says it will begin exporting Chinese-built cars to the U.S. in May
  • It's the first time "Made in China" cars will be available in U.S. showrooms
  • But it's unlikely that Chinese car brands will take on developed markets

Shanghai, China (CNN)Volvo says it will begin exporting vehicles made in a factory in southwest China to the United States next month, the first time Chinese-built passenger cars will roll into American showrooms.

Parent company Geely Automobile, which bought Volvo in 2010, is seeking to prove that a Chinese company can manage a global auto brand.
    Geely's gambit will be watched to see if it paves the way for other Chinese car manufacturers to crack developed markets.
    CEO Håkan Samuelsson said Volvo planned to sell 1,500 Chinese-made S60 Inscription sedans in 2015 and 5,000 annually in subsequent years.
    For many U.S. consumers, China is still more closely linked with cheap clothing and electronics than luxury vehicles, but Samuelsson downplayed any concerns about quality.
    "We don't highlight where the vehicle is built but we don't keep it a secret. We sell them as Volvos and we know they are exactly the same in quality no matter where they are produced," he told CNN.
    The car will be one of four models produced in a manufacturing plant in Chengdu that opened in 2013.
    But given that Volvo's brand is staked on its reputation for safety, analysts said the company will have to tread carefully.
    "They have a strong enough reputation no matter where they're made. They will have to make sure they don't ruin that perception with any quality issues," said Raymond Tsang, a Shanghai-based partner at consultants Bain & Company.
    A Volvo manufacturing plant in Chengdu. Previously owned by Ford, Volvo was acquired by Geely Automobile in 2010.

    Chinese brands going global?

    China surpassed the U.S. as the largest market for car sales globally in 2009, and most major automakers build cars in China.
    But until now those cars have been sold almost exclusively in China.
    Chinese car manufacturers like Geely and its rival Great Wall Motor do export their models to countries in Africa, the Middle East and Eastern Europe. But none have so far dared tackle developed markets like the U.S. and Western Europe.
    Geely chairman Li Shufu said he hoped the company would eventually become a global car brand, but said there were no current plans to begin export its home-grown brand to U.S. showrooms.
    "We have the ambition, yes; determination yes, but I'm also [a] very realistic person," he said.
    Industry analysts say it's unlikely we will see Chinese car makers shake up the U.S. car market in the same way Japanese and South Korean manufacturers did decades earlier, at least in the near future.
    "Hyundai and Toyota are now extremely successful but it took them decades to move away from being perceived as lower end and lower quality than U.S. cars," said Tsang.
    "And now the market is even more competitive, especially for entry level models."