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China's Biggest Automaker SAIC Puts US Ambitions on Hold

State-owned SAIC Motor’s wait-and-see attitude contrasts with that of Guangzhou Automobile Group Co., which is pressing ahead with a plan to start sales of its Trumpchi brand in the U.S.

SAIC Motor Corp., China’s biggest carmaker by sales, has halted a plan to export its own branded vehicles to the U.S. until it gets more clarity on Sino-U.S. trade policy under President Donald Trump.

SAIC Motor, which has joint ventures with General Motors Co. and Volkswagen AG in China, has been exporting locally made Buick Envision sport utility vehicles to North America since May last year. The Shanghai-based company, which owns the MG and Roewe brands, has said it’s making preparations to enter the U.S. -- the world’s second-biggest auto market -- on its own.

“Eventually we aim to have all, but at the moment we are focusing on” China and then Europe, Michael Yang, executive director of SAIC Motor’s international department, said at a briefing at the Shanghai motor show on Wednesday. “The reason is the ‘climate change’ after the new presidency.”

SAIC Motor had set an internal target to enter both the U.S. and Europe market by 2019, according to a person with knowledge of the matter who asked not to be identified because the plan isn’t public.

Since Trump’s election, he has threatened to slap a border tax on imported autos and his “America First” approach to economic policy has included withdrawing the U.S. from the Trans-Pacific Partnership. U.S. trade relations with China were a cornerstone of Trump’s campaign as he accused the Asian nation of unfair trade practices and threatened to slap a levy on Chinese products.

Other Automakers Press Ahead

State-owned SAIC Motor’s wait-and-see attitude contrasts with that of Guangzhou Automobile Group Co., which is pressing ahead with a plan to start sales of its Trumpchi brand in the U.S.

GAC, the sixth-largest automaker in China by volume, is “actively preparing” to establish its research center in the U.S. while conducting a preliminary study of the North American market, Yu Jun, general manager of the state-owned company’s Trumpchi unit, said at the Shanghai auto show. The manufacturer aims to enter the U.S. no later than 2019 to help build Trumpchi into an international brand, he said.

Other Chinese brands like Warren Buffett-backed BYD Co. and Volvo Cars owner Zhejiang Geely Holding Group Co. have voiced similar ambitions as far back as a decade ago but have so far yet to achieve the goal.

GAC has been laying the groundwork for its U.S. entry for several years, featuring its GS5 sedan in a Transformers movie in 2014 and airing commercials for its GS7 SUV on giant electronic billboards in New York’s Times Square in November to raise consumer awareness.

SAIC Motor also has a presence in the U.S. It has a trading company based in Detroit, a research center and a venture capital investment firm in Silicon Valley. The China-made Buick Envision that’s exported to the U.S. is made at SAIC’s joint venture with GM.

Shares of SAIC Motor have gained 11% this year, while Guangzhou Automobile has risen 25%.

SAIC Motor unveiled a sports coupe concept under its MG brand, which it bills as the start of a design revamp that it hopes will lift the marque’s profile among local and overseas consumers. SAIC Motor accounts for one out of five vehicles sold in the country last year and posted its eight consecutive year of profit gain in 2016. Under the Roewe brand, SAIC Motor introduced an Internet-connected SUV with Alibaba Group Holding Ltd.

GAC, which has joint ventures with Fiat Chrysler Automobiles NV, Toyota Motor Corp. and Honda Motor Co., created the Trumpchi brand in 2010 after being a production partner for foreign carmakers for more than a decade. The company almost doubled its delivery of Trumpchi vehicles last year to more than 380,000 units on the popularity of its GS4 and GS8 SUVs. The automaker said earlier this year it expects to have about 10 percent of Trumpchi sales from overseas markets by 2020.

“Trumpchi’s goal is to become a world-class Chinese brand,” said Yu. “And we would like to make our research, production and sales global.”

By Bloomberg News

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