Reinbold to sell Chinese autos in Indianapolis: Affordable luxury line likely to hit the streets in 2008

May 22, 2006

Local car dealer Dennis Reinbold, well-known for selling high-end German and Japanese automobiles, will add Chinese vehicles to his lineup, possibly by the end of next year.

Reinbold will be among the first dealers in the United States to sell cars made in Wuhu, China, by the state-owned Chery Automobile Co., one of that country's fastest-growing automakers.

Reinbold, who is also an Indy Racing League team owner, paid $2 million to sell the Chinese cars, which will be distributed by New York-based Visionary Vehicles.

The investment gives Reinbold a stake in Visionary, founded by Malcolm Bricklin, the auto entrepreneur known for successfully bringing Subaru to the United States.

He also has the dubious distinction of bringing Americans the low-cost Yugo, which was imported from the former Yugoslavia in the 1980s. Sanctions imposed in the early 1990s during the Balkans wars brought an end to importation, leaving dealers in the lurch.

Visionary is Chery's exclusive North American distributor. Reinbold's $2 million gave him the Indianapolis territory. Visionary has sold 80 territories for $2 million apiece so far. It hopes to dole out 250.

"I thought the concept was an interesting one," said Reinbold, principal of Indianapolis-based Dreyer & Reinbold Inc., which owns two BMW and two Infiniti dealerships, plus a Mini Cooper and a Volkswagen dealership.

After reading about the idea, Reinbold contacted Bricklin and met with him in New York to learn more.

"It's a good concept," he said of giving dealers ownership stakes in return for their investment. Those stakes will give Reinbold and other dealers input into design, marketing, and the cost and names of vehicles.

As many as five Chery models could hit the United States: a four-door sedan, a racy hardtop convertible, a crossover SUV, a traditional SUV and a coupe.

The cars are expected to have BMWlike interiors. An Austrian firm is helping with engine design, and Italian firms are helping with design.

And the cars will be priced like Toyotas. A Chery sedan about the size of a Camry likely will sell for less than $20,000.

"I like the concept of affordable luxury," Reinbold said. "If these were $8,000 cars, I wouldn't have been interested."

Reinbold says he'll start with one dealership-he hasn't decided on the location-and expand as demand warrants. He's confident he'll eventually open more dealerships.

"I think these cars will do well, because they'll offer a lot for a reasonable price," he said.

But the venture is not without risk. A key question: Will Americans be willing to pay $20,000 for cars from a relatively untested Chinese automaker that's never had a presence here?

"It's a brand-new brand," Wesley Brown, a partner at the Los Angelesbased consumer research firm Iceology, told The Wall Street Journal this spring. "They will be worried about quality and reliability. [Chery] will have only one chance to do it and get it right."

Timing of the cars' arrival in the United States also is uncertain. Chery initially estimated it would be selling models here by the end of next year. But it must ramp up production and clear regulatory hurdles to meet that time line.

Last year, Chery sold nearly 200,000 cars. It exported about 18,000, mostly to the Middle East.


This hardtop convertible is one of five Chinese models likely to be sold here.
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