China In The U.S. Auto Market

China's Chery and Geely car companies are poised to sell their cars as bargain basement models on the U.S. market starting in 2008 or 2009. So far, their quality has been so lacking that they have been unable to meet U.S. crash test and emissions standards, but the firms are working on solving those problems.

More competition at the low end of the market is, of course, the last thing that embattled General Motors, with its Chevy division, Ford's low end models, and Daimler-Chrysler with its Dodge models needs. Korean manufacturers Hyundai and Kia have already been putting competitive pressure on this segment of the market, and major sources of U.S. automotive imports like Mexico, Canada, Japan, South Korea and Germany all have much higher labor costs than China does.