Saturday, July 30, 2016

They're Coming to America



Alexander Carabitses

Last week, when discussing PSA's return to the US, I also mentioned that several other brands are looking into entering or re-entering the US market.  I feel like this opened up a can of worms in the minds of many readers, and that it can only be settled if I go in depth with this topic.

So why are brands returning or coming to the US for the first time, to begin with?  The simple answer is that the US offers an opportunity for brands to grow.  Keep in mind, all of these brands already have a presence in Europe and China, the latter of which is the world's largest car market.  If successful in that region, the only place to go where growth would be viable is North America, specifically the United States.  Now, let's take a look at these brands and see whether or not they will succeed in the US.

Note that I will not be discussing PSA's return, as I did that last week.

First up, we have SsangYong, a South Korean automaker that is owned by the Indian automaker, Mahindra.  The brand primarily makes crossovers and SUVs, although there is a single sedan in the brand's lineup, called the Chairman W.  The brand is scheduled to launch in late 2019, and the launch will either "make or break the company", according to SsangYong's CEO.  However, Autoblog.com cites that we shouldn't hold our breath, given that SsnagYong needs approval from Mahindra to make this crucial move.  Mahindra, itself, bailed on its plans to launch a small pickup truck earlier in the decade, much to the outrage of dealers.  However, Mahindra is now looking into selling some of its own cars here in the US in the future.  In reality, it is hard to believe anything that the company says given what took place in 2010, so no, we really shouldn't hold our breath for both Mahindra and SsangYong to show up, but we shouldn't be surprised if they actually do.  Mahindra itself sells crappy cars and trucks that wouldn't work here to begin with, and despite selling vehicles that Americans are currently eating up, SsangYong's product range appears to lag behind the competition, although several redesigned models are showing signs of improvement.
(Image credited to Mahindra)
(Image credited to SsangYong)

We'll now move on to MG Motor Co., or rather Chinese owned MG Motor Co.  SAIC picked up the pieces of this once treasured brand, after the demise of MG Rover.  Despite having an R&D center in Longbridge, England, the cars are mostly developed in China.  For this reason, they aren't the best cars in the world.  And by cars, I mean a subcompact hatch, a lackluster compact sedan, and a newly unveiled subcompact crossover. In 2014, the brand made it clear that it would like to sell cars in the US market, but no concrete plan or timetable was given, and since then, we haven't heard anything from them.  I believe that the brand will eventually come to the US once the Chinese officially feel comfortable selling cars in North America.  Frankly, the beloved MG name could make a US launch a little bit easier for SAIC, although I'm not entirely sure how many people my age will even remember MG.

(Image credited to MG)
(Image credited to MG)
(Image credited to MG)

Next up, we have the VW Group owned Czechoslovakian automaker, Skoda.  Serving as the VW Group's entry level brand around the world, this brand is really nothing more than the hidden gem within the company.  The brand's sales are strong and from what I've read, most customer love these their products, even though they are nothing more than thinly rebadged Volkswagens.  About a month or so ago, the brand announced its interest in returning to the US market, after leaving in the early 1960s.  The brand has even filed US trademarks for the names of some of its cars, including: Octavia, Yeti, and Superb.  The Octavia is a basically a re-bodied Jetta, while the Superb is a rebadged European Passat.  Finally, the Yeti is a quirky subcompact crossover that admittedly needs to be redesigned before it could be sold in North America.  The brand is also due to launch a new crossover called the Kodiaq very soon, so that vehicle could also be sold in the US.  While many have speculated that Skoda could simply replace VW in the US due to Dieselgate, I have heard the well known and respected industry analyst, John McElroy, say that it would take 20 years to establish Skoda here in any way.  I'm sure that Skoda is aware of this, as is the VW Group, so while we may see Skoda's in the US by the end of the decade or sooner (no clear timetable was given), by no means should it replace VW.  Also, note that Skoda hasn't suffered from Dieselgate elsewhere in the world, so that should make a US launch much smoother than if it already had the same bad rap that Volkswagen has.
(Image credited to Skoda)
(Image credited to Skoda)
(Image credited to Skoda)
(Image credited to Skoda)


Volkswagen Group also has plans to enter the commercial truck segment in the US with either the Scania or MAN brands.  While not cars, selling class 5 through 8 trucks in the US should help VW Group boost its sales in this country.  It's currently unclear which brand will be sold here, or when trucks that are solely developed for the US market will make their way to fleets.  Given that VW announced this bit of news in the same press conference that featured them all saying that by 2025, they would be selling 30 new EVs, and that they would account for 25% of the company's sales, I predict we'll see VW Group trucks by the middle of the next decade at the latest.
(Image credited to Scania)
(Image credited to MAN Trucks)

Finally, we have Renault.  Now Renault is a French automaker, and a successful one at that.  In fact, it is so successful that it owns Nissan, which itself is very successful. Around this time last year, the brand announced plans to enter the Canadian market with the Twizy, which is basically a cute electric mobility pod.  Renault did this to gauge consumer reaction to this French "car".  The next step was to launch the Kangoo ZE compact cargo van. If Canadian consumer reaction to each of these vehicles was good, then the brand would launch even more models in Canada, while also making a full fledged US comeback.  Earlier this year, the Twizy was approved for testing in San Fransisco and NYC, but the strange thing is that the vehicle was branded as a Nissan.  A few weeks ago, Renault announced that it was ready to sell the Twizy in Canada and is simply waiting to for the government to approve of the vehicle.  At the end of the day, I truly hope that Renault does make a North American return.  I have seen some of their most recent cars in person and in pictures, and I am confident that these vehicles will do well here.  We'll have to wait and see how consumers react, especially given that the models that Renault is using to gauge consumer interest are EVs, and therefore aren't volume sellers.
(Image credited to Renault)
(Image credited to Renault)


As you all can see, there will be a lot of emerging and remerging brands coming our way very, very soon.  The decision to come to North America is by no means one that can't be taken seriously, as this market is one of the most challenging in the world to break into.  Remember, 20 years is the projected timetable for Skoda to fully establish itself.  For me, seeing this stream of brands making plans to enter this country is an encouraging sign for the industry growth that this country still has to offer.  Plus, after vacationing in Europe for seemingly my entire life, it is great new that brands like Skoda and maybe even Renault will soon be selling cars here in the US.

That's all I have to say on this topic for now.  Thank you for reading and have a great week!

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