OPINION: Delta-made cars face long road

In the early 20th century, the Mississippi Delta attracted Chinese immigrants looking for a better life.
If you grew up in the Delta, you probably wandered into their popular version of the American dream – a grocery store.
Today, very few Chinese-owned stores remain in the Delta, the sons and daughters and grandchildren of these entrepreneurs moving on to pursue other ventures, other dreams.
But one Chinese businessman, Xiaolin “Charles” Wang, has a Delta dream, and it’s much, much bigger than any grocery store or restaurant.
Last week, Wang announced that his company, GreenTech Automotive Inc., planned to build a $2 billion plant that would employ 4,500 people and produce 250,000 fuel-efficient cars on a 1,500-acre site in Tunica County.
The original grandiose plans, made public during the summer, called for a $6.5 billion plant that would employ 25,000 people and crank out 1 million vehicles a year.
But Wang and his former business partner, Yung “Benjamin” Yeung, got into a tiff and their partnership blew up. Wang and Yeung went their separate ways.
Yeung landed near Bay Minette, Ala., where he announced in late September that he planned to move ahead with his plans for an auto plant employing 3,000 people and producing about 250,000 hybrids.
Yeung – also known as Yang Rong – said he was looking to attract $7.9 billion from private investors to help fund his company, Hybrid Kinetic Motors, which is based now in Los Angeles. Yeung said he needs about $1.5 billion to get the Alabama plant off the ground.
Auto experts are skeptical at best that either GreenTech or Hybrid Kinetic will ever get off the ground.
John O’Dell, a senior editor for Edmunds’ GreenCarAdvisor.com, sees the two former Chinese business partners merely playing a game, trying to one-up the other.
Games aside, their business plans may have a few fatal flaws. Besides trying to add capacity to a hard-hit U.S. auto market, the proposed companies want to build hybrids when hybrids don’t make up a large share of the market – about 2 percent of total sales.
“And they don’t have any suppliers,” O’Dell noted.
GreenTech’s Web site suggests it will work with third-party suppliers in the U.S. and import other parts.
Aaron Bragman, an auto industry analysts with consulting firm IHS Global Insight, noted that neither company has developed a network of dealers to sell its cars.
And before they can even sell their first vehicles, the companies must meet federal environmental and vehicle safety standards.
Meanwhile, we have Toyota, the undisputed hybrid leader, which has sold more than 1.4 million Prius Hybrids since its introduction in 1997. It sells about 250,000 Prius in the U.S., and is shooting for 400,000 in a couple of years.
An established auto company like Toyota has to shelve its hybrid plant in Blue Springs, yet we have two Chinese start-ups – or upstarts – saying they’re ready to roll with their plans?
If you’re going to dream, dream big.

Contact Dennis Seid at dennis.seid@djournal.com or at (662) 678-1578.

Dennis Seid/NEMS Daily Journal