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Chinese automakers using these US brands to test out North American market

For the 2022 model year, Dodge has reintroduced the Journey nameplate in Mexico. The vehicle is based on the Trumpchi GS5 compact SUV from one of Stellantis NV’s Chinese joint venture partners, Guangzhou Automobile Group Co. Ltd., which is shipping these small crossovers across the Pacific Ocean.

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Dodge for the 2022 model year has reintroduced the Journey nameplate in Mexico. The vehicles are based on the GS5 compact SUVs from one of the Stellantis NV's Chinese joint venture partners, Guangzhou Automobile Group Co. Ltd. Courtesy of Stellantis NV/TNS
TNS

Car buyers will find few Chinese vehicles in U.S. showrooms, but they will in Mexico — under American brand names.

For the 2022 model year, Dodge has reintroduced the Journey nameplate in Mexico. The vehicle is based on the Trumpchi GS5 compact SUV from one of Stellantis NV’s Chinese joint venture partners, Guangzhou Automobile Group Co. Ltd., which is shipping these small crossovers across the Pacific Ocean.

The Journey is not alone. It joins the Chevrolet Captiva, introduced in March in Mexico. It is a variant of the Baojun 530 compact crossover from SAIC-GM-Wuling, one of General Motors Co.’s Chinese joint ventures.

Chinese automakers for years have sought to enter the lucrative, yet competitive North American auto market. The Trump administration’s enactment of 25% tariffs on vehicles made in China, however, halted or delayed many of those plans, and the Biden administration shows no signs of removing them. Instead, the Chinese automakers have found a way into Mexico with U.S. automakers willing to fill gaps in their lineups of small crossovers that aren’t the big SUVs and trucks Americans love.

“There’s efforts to get into the market whatever way possible,” said Michael Dunne, CEO of Hong Kong-based consulting firm ZoZo Go LLC. “In some cases, the big picture is they are confronting this tariff wall that they have never had to contend with before, and they are finding ways around it.”

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But, Dunne said, automakers like GM and Stellantis in doing so may create confusion for customers and hurt their brand image: “What is the value of the brand if you can just put it on anything?”

It’s not the first time U.S. brands have lent their names to foreign models. The Detroit Three previously rebadged Japanese and Korean imports in the 1980s and 1990s, though those efforts weren’t long-lasting. GM’s defunct Geo brand launched in 1989 with rebadged vehicles built by Isuzu Motors Ltd., Suzuki Motor Corp. and Toyota Motor Corp. as the foreign makes chipped away at its U.S. market share. By 1997, however, sales had dropped 30% below their peak, and the brand was nixed.

Likewise, Chrysler Corp., a predecessor of Stellantis, filled out its Eagle brand lineup with rebadged Mitsubishi Motors Corp. vehicles built through the Diamond-Star Motors joint venture after acquiring the brand with Jeep in 1987 from American Motors Corp. The Eagle Talon hatchback was the brand’s final offering in 1998.

“Bringing these entry-level models is a tradition that goes on for decades,” said Sam Fiorani, vice president of global forecasting for AutoForecast Solutions LLC. “Bringing those vehicles allows them to have entry-level models that don’t cost them any engineering resources.”

That’s important for a price-sensitive market like Mexico, Fiorani said. With the Journey, Stellantis is taking advantage of an existing alliance by providing a vehicle that fits the market needs and leverages a familiar model name, Stellantis spokesman Miguel Ceballos said. The Dodge Journey starts at about $27,100 (555,900 pesos). GAC did not return a request for comment.

“The type of product under the Stellantis portfolio, we don’t have anything like it,” Ceballos said. “It is an important segment here in Mexico. That is why we chose to replace the Dodge Journey. It’s something we have to offer.”

He noted it’s not the first time the automaker has used a donor car in the Mexican market. The Dodge Attitude subcompact sedan launched in 2006 was based off Hyundai Motor Co.’s Accent as the automaker sought to enter the Mexican market. Today, the Attitude borrows from a Mitsubishi sedan. The Journey previously had been built at the Toluca Assembly Plant in Mexico before being discontinued after the 2020 model year.

These small SUVs are difficult to bring to the United States and compete with used vehicles just two or three years old with less than 50,000 miles, Fiorani said. By bringing them to a market like Mexico, it gives new entrants a low-cost chance to learn without damaging their own brand or having a service or dealership network set up.

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“They’re dipping a toe to see what they are competing against,” Fiorani said. “They can determine, ‘Our quality needs to be fixed here, service fixed there’ without tarnishing the brand and ruining any chance of expansion.”

©2021 www.detroitnews.com. Visit at detroitnews.com. Distributed by Tribune Content Agency, LLC.

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