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Chinese Automaker GAC Planned US Production for 2019, Will Delay Due to Trade War

Jan. 15, 2019
Analysts predict rapid contraction in the auto industry should more tariffs take effect.

The trade war between Beijing and Washington has caused Chinese automaker GAC to delay its entry into the U.S. market until 2020  a company executive said on Jan. 14 at the Detroit auto show.

"We originally had the plan to launch our first vehicle in the U.S. at the end of 2019," GAC President Yu Jun said through a company interpreter. "However we have postponed our plans due to the recent development on trade. We're making steady progress towards it." GAC now planned to launch its first product in the U.S. in the first half of 2020, Yu said.  

Beijing and Washington remained locked in a trade war that could escalate as soon as next month, when the Commerce Department is expected to deliver a report on possible new auto tariffs. 

Analysts predict rapid contraction in the auto industry should more tariffs take effect.

"Tariffs would be devastating to the entire industry," said Robert Carter, chief of Toyota's North American sales, adding that vehicle prices would increase and suppress sales.

Cox Automotive chief analyst Jonathan Smoke said 47% of the vehicles sold in the United States in 2018 were imported. 

"Tariffs already had an impact in 2018," he said. "We believe about two percent of today's prices are because of the tariffs that were already implemented."

The average price of a car in the United States was $36,000 in 2018, up more than three percent from the previous year. 

The privately-held GAC Group, which is participating in its fifth Detroit show, said it will open its third U.S. research and development center on Jan. 16 in Detroit. 

Copyright Agence France-Presse, 2019

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