Advice For Chinese Car Companies Looking To Launch In America

Last year I spoke with a Chinese car manufacturer as well as a private equity firm looking to support the launch of a Chinese auto manufacturer in the US.

In both cases, I spoke of a few key items that I believe are necessary for their success:

1. Make Friends Before You Try To Sell Us

Involve the customer BEFORE you bring the car to market. Introducing the company and the prototypes (or even the Chinese version of the car) that you plan to sell to the US at least a year in advance is key. In the US, you're likely to find a lot of people who are skeptical about the intentions of some Chinese companies. They are skeptical about the quality of the cars built in China (regardless of manufacturer) as well as the safety, durability and reliability of them.

There has been so much in the press about the US debt that is owned by the Chinese that some are worried about what that means for our future (although, it seems every country has a little US debt on their books these days). So while I have no idea what the larger plans are for Chinese companies, I do know that to have any chance at success in the US, they have to get people here comfortable with their car companies and their cars.

2. Be Social

Any new manufacturer -- or one that's trying to reclaim a position in the market -- should use social sites and tools as a way to spread the word and to gain some insight about how to launch.

Social networking and social sites are all the rage, I realize. But what many don't realize is that they are terrific marketing tools for getting deep insights about the customer and the market. They are also great ways to listen to what consumer concerns are and how to overcome them. NetworkedInsights is one such social listening company. ListenLogic is another. Firms like these help companies take that information and act upon it. The tools are out there and are far more efficient, and much more timely and accurate than focus groups.

3. Invite Customers to be your Advocates

If a few of the vehicles could be circulated through the right markets and the right types of people, the kind of viral marketing benefits would be second to none. Ford's recent "Fiesta Movement" campaign is one such example that (at least based on the early orders placed for the car) appears successful.

But again, this has to be done early, not after the cars are being sold. For unknown entities like the Chinese car makers will be to most Americans, their ability to get the "average Joe" talking about the cars will not only be far more effective than a traditional ad campaign, it will be mandatory. If the Koreans had employed this strategy 15 or 20 years ago, they may have realized success a lot sooner than they did.

4. Fix or Create a Better Internal Corporate Structure

This is probably the most boring of the points but one of the most important in my experience.

One of the major issues within the Detroit auto companies (and others as well) is the real lack of coordination between marketing, sales and manufacturing. The incentives for each group are so varied that it makes it almost impossible to get them on the same page.

Marketers are the voice of the customer, looking to build brand and increase margin. Sales are thinking short term goals to move the metal and keep the factories humming and love a good sales event to get things moving. Manufacturers are looking to deliver what you need at the lowest possible cost. They will endlessly try to get the marketers to agree to eliminate a feature, reduce the quality in a material, or whatever to bring the cost per unit down.

You would think that these tensions are necessary and each important (and they are) to keep things in check but the reality is that these three groups are not equal in most auto companies so the balance is never achieved. The hierarchy is typically: manufacturing, sales and then marketing at a distant third. This lopsidedness is what usually spells disaster. So, getting this right at the get-go would be huge!

5. Understand and Become The World's First Customer-Driven Car Company

This one extends beyond just the Chinese and their attempts to launch in our market.

I am of the belief that there has never been a customer focused car company and I would love to hope that the Chinese might be interested in becoming the first. And because they are launching for the first time in the US, with a clean slate for the most part, this is a huge opportunity for them.

Many would argue that Saturn was the first real customer driven car company. I would agree from a marketing standpoint, but not from a company standpoint. They built cars and supported them well at the onset but they stopped listening to the customer shortly thereafter. The needs of the customer were not part of the cycle plans. To be truly customer driven, you have to listen to the customer and constantly evolve the product to meet their needs.

This does not have to be costly and today, versus when Saturn launched, that information is almost perfect. If you are starting from scratch, there are far fewer excuses against having supply flow with demand in a flexible manner, or for innovating based on customers wants and needs. And why not be the first to have your customers dictate the way you go to market and to support it? I am not saying this is easy, but without the constraints faced by the current US manufacturers, the ability to start fresh and focused on the customer is a far better solution.