China wants to enter the U.S. car market, but a rough road lies ahead

Germany was first. It shipped the Volkswagen Beetle to the United States in 1949. It got off to a slow start only to be embraced by an enthusiastic American public.

Japan came next, winning U.S. customers in the 1970s with its own mass-market cars. After that, South Korea offered its Hyundais and Kias.

Now, it's China's turn. Or is it?

Big, state-controlled Chinese automaker GAC Motor plans to start selling a gas-powered seven-passenger SUV priced around $40,000 in the U.S. next year. The company said more models will follow — including all-electric cars.

Chinese automakers have tried to enter the U.S. market before and failed, crippled by subpar quality, failure to meet tough U.S. safety standards, lack of consumer awareness and ill-conceived import partnerships.

But GAC says this time is different.

"A few years ago, we were not ready enough to enter the U.S. market with our level of technology, quality and competitiveness," GAC Motor President Yu Jun said. But he said the company is now "well prepared."

GAC stands for Guangzhou Automobile Group. Located near the concentration of Japanese auto suppliers in southern China, GAC was an early adopter of Japanese quality standards, analysts say.

First, though, the company must establish a U.S. dealer network. In March, GAC executives will fly to Las Vegas, where they will glad hand potential distributors at the National Automobile Dealers Association annual convention.

China's rise in production volume and quality has been breathtaking. A minor player as recently as the late 1990s, when it sold about 2 million vehicles, almost all of them in China, the country is now the world's largest automobile producer.

However, vehicle sales have flattened there and the carmakers need a new market.

Success in the U.S. will translate into more sales back in China, said Mark Wakefield of the consulting firm AlixPartners. The idea: If U.S. customers embrace a China-made car, it must mean the quality is high. "There's a premium for a brand that comes with a [U.S.] stamp of approval," he said.