A few months ago, Motoring Weekly wrote about a new entrant to the US market: Zotye (pronounced Zo-Tay) via a California based company, HAAH Automotive. The CEO of HAAH is teasing the media with a comment that they will be bringing a second Zotye brand to market very soon.
The founder of HAAH is Duke Hale, a 35-year veteran of the US automotive industry having been a former COO at Isuzu and CEO of Lotus US as well as having Vice President roles at the US divisions of Volvo, Mazda and Jaguar Land Rover. Zotye is not in the same league as these manufacturers, however his team has all the necessary policy, procedure and technology to bring Zotye and its other brands to this market.
They have already signed up 19 dealers across the US for the Chinese brand and expect sales to start in 2020 with a compact SUV, however the talk of another brand in the stable suggests that HAAH considers the US market to be ripe for low price-point products. Zotye’s sub-brand in China is called Traum, a German word for “dream” and is considered an even cheaper brand than Zotye! One wonders about whether these vehicles could meet ever stringent cash tests – Great Wall, for example, has the lowest rating of any vehicle in the Australian market and the ANCAP ratings used here are based on the EuroNCAP ratings from the European Union which in turn are similar to the US ratings. Hopefully, both Zotye and Traum will get at least one star!
One thing to note about both Zotye and Traum – their designs are nothing special, simply a mix of design features from many other manufacturers based in Europe and Asia. They really are run-of-the-mill vehicles that blend in with all other cars on the road, especially when design features are copied from Audi, VW and others! Even the vehicles with design input from Pininfarina are bland and un-noteworthy, which reflects poorly on the Italian design house.
Zotye is a very young entrant into the automotive world and signed a deal early on with Ford to build under licence and has recently bought old kit from FIAT to build their cast-off designs in China under their brand names. What is more interesting is the timing of Zotye’s entrance to the US market – at a time when the two Governments are rattling sabres at each other and trying to be tough. If tariffs are laid on more Chinese products, it might mean that the price advantage will be lost in the US market, although Hale was quoted as saying that they could withstand a 10-15% tariff!
Zotye and HAAH want to keep the number of dealers down to under 140 across the US and have said that they want to sell online, so the dealers will really be delivery and service centres in a style similar to the one that Tesla tried and was criticised for.
We are also surprised that the UAW (Union of Auto Workers) hasn’t lobbied the US Government to ban these imports – every sale is a loss to the Big Three because a reasonable number of buyers could have bought a locally built vehicle instead – even a locally built Toyota or Honda who are outside the union’s domain. If the Government is truly sincere about saving manufacturing jobs and “making America great again”, the last thing they should be doing is allowing a company to sell a product that destroys local jobs!
Time will tell whether the two brands are a success – they are more likely to succeed if the US economy falls off a cliff and people stop buying more expensive cars from the local manufacturers and the established Japanese brands. However, if they do succeed, it could cause a backlash from the Manufacturing aka Rust Belt thanks to ever decreasing factory jobs.