Chery Automobile Co Ltd is expected to restart a program to make its cars in the United States soon as its US partner has managed to raise the funds to support the carmaker's expansion.
Visionary Vehicles LLC, which is working to create a network of US dealers to sell vehicles produced by Chery, has US$200 million to fund the sale of the cars in the United States, said a statement posted on Visionary's Website.
James Manley, founder of the investment-banking group Atlantic Pacific Capital Inc, confirmed last week that the money has been deposited into an escrow account for the joint venture created by Visionary Vehicles and Chery.
Zhang Lin, general manager of Chery International Sales Co, declined to comment yesterday.
The project was postponed last year as Visionary lacked money to complete the investment for the joint venture and was hampered by slow progress in building a dealer network, Zhang said earlier.
Anhui Province-based Chery, one of China's leading private carmakers, singed the contract with Visionary in 2004 to produce and sell five models starting from 2007 -- a compact car, sedan, crossover, sport utility vehicle and multi purpose vehicle.
According to a previous plan, Visionary, started by Malcolm Bricklin, would provide US$200 million and Chery would offer a US$300 million investment through intellectual property rights, equipment and plants for product development and production.
Bricklin, who introduced Japan's Fuji Heavy Industries Ltd's Subaru in the 1960s, said he expects to sell 250,000 Chery cars in the venture's first year of operations with a network of 250 dealers.
Visionary announced it has signed up more than 50 dealers so far, with two of them having invested US$2 million each, the statement added.
However, Chery also faces other problems in trying to tap into the US market as General Motors Corp, the world's largest automaker, issued a lawyer's letter alleging trademark infringement as Chery's name is close to GM's Chevy brand.
Chery's models, competitively priced at between US$19,000 and US$25,000, are likely to further erode the market share of General Motors Corp and Ford Motor Corp in the United States.
(Shanghai Daily June 7, 2006)