Chinese Automakers are Building American-Style Cars-Just not for Americans

Dow Jones10-14 21:00

PARIS -- Chinese carmakers can't build or sell cars in the U.S., but they are building the kinds of cars Americans would love.

Three-row luxury SUVs with built-in refrigerators and seats that conform to a passenger's body. Pickup trucks that emphasize towing power and fuel economy. Fast-charging electric vehicles for speedy family road trips.

Chinese automakers hope these offerings will help them aggressively expand overseas and offset slowing sales and hyper-competition at home.

But while executives at the Paris Motor Show emphasized that global expansion is vital to becoming the world's top car companies, many face the major hurdle of being shut out of the lucrative U.S. market -- the world's second-largest.

Some, like EV and hybrid giant BYD, have brushed off any American plans for now. Stella Li, BYD's executive vice president, said the company intends to dethrone Toyota as the world's largest automaker by sales and that this can be achieved without selling cars in the U.S. Toyota sold 11.3 million vehicles in 2025, compared with 4.6 million by BYD.

"We don't need the U.S. market to be number one," Li told The Wall Street Journal on the sidelines of the show.

Other executives in Paris said while they currently have no plans to enter the U.S., access is necessary for any automaker looking to become one of the biggest in the world.

"The U.S. market is a very crucial market for all of the participants in the motor industry," said Zhao Fei, general manager of Changan Group.

State-owned Changan, China's fourth-largest automaker, is targeting 1.5 million vehicle exports outside of China by the end of the decade, more than double its total in 2025, as part of a plan to become a top-10 global automaker.

"You can't be one of the 10 biggest without at least having a certain share in North America," said Klaus Zyciora, Changan's global chief executive adviser.

Chinese cars are effectively blocked from the U.S. because of high tariffs and restrictions on connected software. A bill moving through Congress is seeking to turn those restrictions into a legislative ban. Lawmakers and auto industry executives argue that camera-equipped, internet-connected Chinese cars represent a national security threat and could eviscerate a crucial domestic industry.

Days before a summit last month with Chinese leader Xi Jinping, President Trump alarmed some lawmakers when he said he would welcome China's automakers into the country, so long as they built vehicles locally.

At the Paris show, China's automakers had a lot to offer that may entice American buyers if the rules ever change.

Unlike in Europe and Japan, larger vehicles are becoming more common in China, said Nestor Wu, head of international business for Beijing-based Li Auto, which showed off a feature-rich five-seat SUV in Paris. "Full-size SUVs are almost everywhere," he said.

Wu said the U.S. is a target market for Li Auto, but entry depends on whether trade tensions and other restrictions can be resolved.

Chinese car companies have already encroached on the U.S., swarming Mexico where they now hold more than 20% of market share. They will soon break into Canada, which lowered its tariff rate on tens of thousands of Chinese EVs.

"As long as there's opportunities, of course we will enter a market," Changan's Zhao said of Canada.

Geely Auto, which owns Chinese brands like Zeekr and Lynk & Co., said last week that it would enter Canada in 2027. The company has previously said it is considering expansion into the U.S. when regulations are sorted.

Even without access to the U.S. market, Chinese carmakers are taking subtle jabs at Detroit. In a presentation at the Paris show, BYD's Li rattled off the expanding portfolio of models the company is selling to European customers, including a plug-in hybrid pickup truck called the Shark.

She said the Shark has "more power and torque than the legacy ICE rivals," referring to the internal combustion engine. "It's the pickup redefined," Li said.

Other executives were more circumspect about the difficulty of any expansion plans. Linktour, a new brand owned by a Chinese textile company, is offering tiny aluminum-framed cars that will compete against Fiat Topolinos in Europe. It has no plan to sell vehicles in China, said Leon Zhang, Linktour's vice president of sales and marketing.

"It is already almost impossible to create a new brand [in China]," he said. Linktour is in the process of studying the market for low-speed cars in the U.S., but has no plans to enter at this time.

"To enter into the North American countries is not a very easy thing," Zhang said.

 

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