"The Chinese are coming," the European and North American media have reported over the past year. But the Chinese company that will be first to arrive in North America will be Zhongxing.

Zhongxing who?

Zhongxing Automobile is a small but leading pickup truck and SUV manufacturer located in Baoding, Hebei Province, China. A pioneer in pickup truck exports as well as manufacturing, Zhongxing is gearing up to become the first Chinese automaker to sell automobiles in the U.S. If all goes as planned, this could happen as early as this year.

"Once you open the American marker, it's not difficult to sell 150,000 vehicles a year," said Xiao Wei, president of Zhongxing Automobile Co., Ltd., in an interview with CBU/CAR in November. "There is also the European market. There is a huge market out there. You can go as fast as you are able to."

Working closely with partner China America Cooperative Automotive, Inc., Zhongxing is planning to sell its pickup trucks and SUVs in the U.S. as early as at the end of 2007.

"Zhongxing vehicles are now being tested on U.S. roads through special permits," Xiao told CBU/CAR. "We have been conducting tests in China that simulate the strict conditions in North America. We are also running tests in the U.S. through our partner. Our plan is to begin selling our vehicles by late 2007, but the actual timing depends on how much progress we make with the homologation compliance."

Zhongixng is well on its way to making these dreams a reality, thanks in large part to its exclusive importer and distributor, Zhongxing Auto North America, a subsidiary of New Jersey based management holding company, Chamco Auto.

Chamco showcased Zhongxing's The Landmark™ SUV and Grand Tiger™ pickup truck to potential dealers in Las Vegas, and arranged special events later in Dallas, Orlando, and Los Angeles. It plans to sell Zhongxing vehicles at a suggested retail price of approximately $13,250 for the base model.

"Since announcing this incredible opportunity, we've welcomed a steady stream of potential dealer investors to our headquarters in New Jersey, where they are rapidly singing up to become one of only 100 joint venture partners we'll be accepting," quoted from Chamco's website.

Chamco is positioning itself to become the first U.S. firm to import and distribute Chinese vehicles to the North America and market. Its subsidiary Zhongxing NA signed an agreement with the Chinese automaker earlier last year to homologate, import and distribute Zhongxing vehicles. Chamco has put together a team of experts for Zhongxing NA, with experienced professionals assigned to take charge of compliance, dealer development, financing, quality control, warranty, sales, after-sales service, supply chain management, public relations and legal issues.

Chamco has also acquired special permission from the U.S. Environment Protection Agency and the National Highway Traffic Safety Administration to drive the vehicles on the roads in order to help develop a dealer network.
At this month's North American International Auto Show Zhongxing will once again showcase its vehicles at a hotel near Detroit's Cobo Center.

"Our aim is to invite dealers. So we don't need to get on the show floor at the Cobo Center for publicity purposes," according to company president Mr Xiao.

Zhongxing Auto emerged from the ashes of the now-defunct Tianye Automobile, a State-owned vehicle factory in Baoding, 150km southwest of Beijing. Tianye was China's first pickup truck manufactured. It maintained a leading market share in the early 1990s. Plagued by poor management, the company was eventually purchased by Brilliance China in the late 1990s. It was renamed Zhongxing Automobile after forming a joint venture with a Taiwanese components manufacturer. Under a management team of about 20 people from Brilliance-Jinbei led by Xiao, Zhongxing has grown steadily ever since. It emphasizes R&D and new product development. Today Zhongxing is China's second largest pickup truck manufacturer after Great Wall.

"Through cost reduction and better management, we were able to achieve an annual growth rate of 90 percent in the first three years after Zhongxing was formed in 1999,"Xiao said." Over the past three years, we have focused on new product development , R&D, quality control and after-sales service. And my goal in the next three years is to take our vehicles to developed markets."

When asked whether Zhongxing would be able to reach its 2010 sales goal of 150,000 units, Xiao was optimistic.

"In China, the market demand for pickups is only 100,000 units a year, but demand in North America is 3.1 million annually. Pickups are very popular in North America. Our vehicle has a high cost-performance advantage. We will first focus on certification and homologation before we worry about how many we can sell."

Chamco said it will sell Zhongxing vehicles for up to 20 percent less than similar models that are currently available in the U.S. Roughly 95 percent of the Zhongxing models to be shipped there will be pickup trucks.

"Pickups will be our priority at the beginning .You need to get one foot in the door first, and the other will follow," Xiao joked, alluding to the possibility that this company will move into passenger car production and sales.

Like its main Chinese competitor, Baoding-based Great Wall Motor, Zhongxing plans to being making cars in 2008 at its new facility in Changchun, northeast China. The facility will produce sedans and crossovers, and will start with small MPVs and compact cars.

"The Changchun plant will eventually develop an annual production capacity of 200,000 cars and 500,000 engines," Xiao said.

Zhongxing's Changchun facility, in which Zhongxing owns a 51-percent stake, will exclusively sell and export the products to North America through Chamco Auto, according to a Chamco news release. This means Zhongxing will not only export pickups and SUVs to North America but also sedans and crossover vehicles later.

Zhongxing's joint-venture partner in Changchun is motorcycle manufacturer Chanlin Group." Chanlin has survived cut-throat competition in the motorcycle business. It owns a body shop that has been making Red Flag cars based on the Audi 100.

Chanlin also has R&D capability in lighting and interior trim," he said.

Although Zhongxing lacks its own engine and transmission plants, the company prides itself on its whole-vehicle R&D capability.

"Our vehicles don't look like others .They come under the Zhongxing brand. We have emphasized forward engineering from the very beginning," Xiao said. In fact, Xiao, a mechanical engineer by education, was personally involved in the body design of an earlier SUV model.

Zhongxing was China's top pickup and SUV exporter in 2003 and 2004. With the launch of the the Landmark™ SUV in 2005 and the Grand Tiger™ pickup last year, it now has agreements to export 3,000 Grand Tiger™ pickups to Libya as well as 1,200 Grand Tiger™ pickups and The Landmark™ SUVs to the Ukraine. It is also currently building assembly plants in Russia, Vietnam and Malaysia, and has KD assembly operations in Iran and Egypt.

"It's a big market out there, and capable enterprises should be able to take major piece of the international market," Xiao said.

"It took the Japanese 20 years and the Koreans 10 years to get into the U.S market. It will take the Chinese less than five. People say that Chinese are coming; in fact we are on our way."

The 40-year old president, who also holds a graduate degree in finance, takes tremendous pride in what he and his management team are accomplishing at Zhongxing. The former vice president of Brilliance, Jinbei in Shenyang earned his stripes turning the unprofitable state-owned company into China’s leading light van manufacturer. And after moving to Zhongxing in 1999, Xiao discovered that the Baoding factory had everything he needed to recreate Brilliance-Jinbei's business model. It now looks like a similar success story is unfolding in Baoding, but on a potentially much lager scale if he succeeds in the USA market.