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China's GAC Motor Postpones U.S. Entry on Trade Frictions

China's GAC Motor Postpones U.S. Entry on Trade Frictions

(Bloomberg) -- Guangzhou Automobile Group Co. is putting brakes on its plan to become the first manufacturer to start selling Chinese-branded cars in the U.S., citing the trade dispute between the world’s two biggest economies.

GAC Motor, as the company is known, had a goal to sell cars in America in early 2020 but is now postponing that target as tariffs threaten to make the importing of cars from China more expensive. The company cited “the escalation of China-U.S. trade frictions” and distribution “uncertainties” in a statement on Wednesday.

The company announced several years ago it intended to become the first Chinese carmaker to crack the U.S. market, and has been working on product modifications to appeal to American tastes. The company has made changes to its GS8, a seven-passenger sport utility vehicle sold in China, to meet more-stringent U.S. emissions and crash standards.

Many Chinese automakers have had ambitions to sell cars in the U.S. going back more than a decade, yet none of the plans have come to fruition so far. GAC, Zhejiang Geely Holding Group Co.’s Lynk & Co. brand, Great Wall Motor Co. and Zotye Automobile Co. are among Chinese manufacturers that have expressed interest to expand in the U.S., exhibiting in the country’s auto shows and setting up local sales units and research-and-development operations.

Great Wall, an SUV maker that has been reviewing options for how to build vehicles in the U.S., said it had no immediate comment on whether it is adjusting its plans for America. BYD Co., which makes electric buses in the U.S., said it has no immediate information on whether its business has been impacted by the trade row.

Geely, which has been aiming to start selling Lynk & Co. cars in the U.S. next year, is evaluating its plan for North America, a spokesman said.

To contact Bloomberg News staff for this story: Tian Ying in Beijing at ytian@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Ville Heiskanen, Indranil Ghosh

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With assistance from Bloomberg