Ford’s China partner planning to sell SUVs in the U.S. in 2020

“It won’t stop our deal,” HAAH CEO Duke Hale said of trade uncertainty. “Both Zotye and HAAH are in a position to be able to give up a little margin and still be more than competitive.”

Hale said Zotye is developing two yet-to-be-named compact and midsize SUVs specifically for the U.S. market — two of the most competitive segments — though it’s not clear yet which vehicle would arrive first. The vehicles would be built in China and imported to the U.S. Among the target competitors would be the Toyota RAV4, Honda CR-V and Nissan Rogue — all of which compete with the Ford Escape.

The new company, wholly owned by HAAH, will be based in Lake Forest, Calif. Plans for the dealer network include up to 325 stores nationwide, targeting the top 80 markets in the U.S. — including Metro Detroit.

Others Chinese players have tried and failed to enter the U.S. in the last 15 years, including Chery Automobile Co. and industry giant Geely Automobile Holdings Ltd., which also owns Sweden’s Volvo Cars Ltd. and holds a nearly 10 percent stake in Germany’s Daimler AG. 

Hale said his holding company has been in talks with Zotye for “a couple of years,” evaluating the Chinese automaker’s product for the U.S. market as the small company grows in its home market.

“This company is in growth mode,” he said, “and it’s possible they could get a first-mover advantage.”

Zotye could see some competition from GAC Motor, which came to the Detroit auto show at the beginning of this year with plans to enter the U.S. market by the end of 2019. A spokeswoman for GAC Motor said the automaker is on track to begin selling its GS8 SUV in the U.S. by the beginning of 2020, and is actively recruiting dealers.

The tie-up with HAAH is separate from Zotye’s joint venture with Ford on electric vehicles for the Chinese market, as Zotye is not currently planning to bring EVs to the U.S.

Ford’s China unit continues to struggle, with sales in the Asian market falling by 45 percent in October as an industry-wide sales slowdown sets in. Analysts say that signals the Blue Oval might have missed the wave in the fastest-growing global market.

And as the Dearborn-based automaker looks to stop the bleeding in China, a global tie-up with one of its Chinese joint ventures likely isn’t the focus, Dunne said.

“Inside China, Ford, like many other automakers, was looking for a solution to meeting China’s EV requirements,” he said. “I don’t think they were ever looking for a joint venture for the purpose of being global partners.”

Meantime, privately owned Zotye is coming to the U.S. with one of the market’s hottest products and Ford’s livelihood: SUVs. Within less than two years, the Blue Oval says SUVs, pickups and commercial vehicles will account for nearly 90 percent of its sales volume in the SUV-crazy U.S. market.

The move from Zotye, which sells some 300,000 units in China annually, is likely to get the attention of giants like Geely, which sold 1.2 million vehicles last year.

“There is a certain pride in who will be the first Chinese brand to land cars in the American market,” Dunne said. “If little Zotye is prepared to enter the market, why not the big guys? There probably won’t be a knee-jerk reaction, but others will certainly be watching.”