Chinese cheapies to be sold at Sam's Club?

A Mexican based auto importer, GS motors, may bring their marketing concept to the US. GS Motors imports 4000 cars a year to Mexico. They like the Chinese product from First Auto Works, a/k/a FAW.

The chief executive officer of GS Motors, Kathleen Ligocki, a former Ford marketing strategist, says the Mexican firm has a unique marketing concept. Instead of selling through the traditional dealer network, they market through big box stores. Yes, there are Costco's in Mexico!

GS motors has been so successful it is building it's first assembly plant in Michoacan, MX. They expect units to roll off of the line in 2010. Anyone who knows the Mexican construction system knows these plans might be delayed a bit. Still, the company is in full motion!

The lineup will include the ZX40 which is a small van electric. It is not designed to go long distances. Still, with gas prices likely to rise, electric is the car propulsion system of the future! The big box stores will also be well stocked with the f1 Hatchback costing as little as $5,500.00. Of course, $5,500 in Mexico is a fair sum of money. To a US buyer it is only a drop in the hat!

The ZX40ST electric work truck features an all steel body with side impact doors. It is dot compliant with seatbelts and tempered safety glass. It has a heating and defrosting system, and just important to most consumers, air conditioning, although optional. With a 35 mile distance and battery replacement at 25,000 miles, it is going to be an expensive and ultimately unpopular vehicle. Worse is it's price, rolling off of the line at $19.000 plus bucks!

Selling a vehicle through Sam's Club or Costco is one thing. Service is another. Such a move may require stores to retro-fit for vehicle service. Stores that have already been built to maximize their lot size may have a difficult time finding room for service bays.

Discount stores like Costco are known to drop a product like a rock if it does not sell. Getting dealerships approved will be another thing. Local opposition will surely exist from traditonal car dealers. In Colorado, dealers are not allowed to sell non-automovtive products. Costco has been inventive in getting around these roadblocks with it's liquor stores, which are stores within a store in Colorado.

Chinese auto makers may not have the same success as the Japanese manufacturers like Honda and Toyota. Americans demand a reliable car, even if it is cheap, cheap, cheap. Even if the quality is there, the Chinese face an image problem as their Wall mart products have so often been a failure.

Still, an auto company that brings a fairly reliable car to the US that costs centavos has a chance. The typical business model is to market to the lower end market. As the product is put on the road and gathers attention the foreign auto company builds a better, more expensive product. In time, the Chinese might put the Japanese to shame, and the few US auto makers left will have an even tougher time keeping up!

MILES ZX40ST