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China's GAC Motor postpones US entry on trade frictions

Beijing

GUANGZHOU Automobile Group Co is putting brakes on its plan to become the first manufacturer to start selling Chinese-branded cars in the United States, 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-US trade frictions" and distribution "uncertainties" in a statement on Wednesday.

The company announced several years ago that it intended to become the first Chinese carmaker to crack the US market, and has been working on product modifications to appeal to American tastes.

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The company has made changes to its GS8, a seven-passenger sport utility vehicle sold in China, to meet more stringent US emissions and crash standards.

Many Chinese carmakers have had ambitions to sell cars in the US 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 US, exhibiting in the country's motor 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 US, said it had no immediate comment on whether it is adjusting its plans for America. BYD Co, which makes electric buses in the US, 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 US next year, is evaluating its plan for North America, a spokesman said. BLOOMBERG