OTTAWA - North America's Big Three automakers would be pummelled "like boxers with one arm tied behind their backs'' if Chinese companies flood the market with low-priced cars and trucks, says the head of the Canadian Auto Workers union.
CAW president Buzz Hargrove said General Motors, Ford and Chrysler will have a tough go against Chinese automakers since Beijing places strict trade restrictions on foreign companies selling cars in China.
That puts the Big Three at a disadvantage, he said, since Canadian and American trade rules are more lax than China's.
"We're getting beat up,'' Hargrove said.
"GM, Ford and Chrysler are just like boxers with one arm tied behind their backs, where these countries that are protecting their market and shipping in here, it's just so unfair and so one-sided.''
Industry Minister Jim Prentice defended the Conservative government's international trade policy in an interview with The Canadian Press.
"It would be in the interest of Canadian consumers to be able to purchase products that are available on the market resulting from free and fair trade,'' Prentice said.
However, he conceded Canada's automotive industry has been pinched by a softening U.S. economy and the strengthened loonie, which reached parity with the greenback in late September en route to a record high of $1.10 in November.
If the number of display booths at the annual auto show are any indication, it appears more and more Chinese companies are poised to get into the North American automotive game.
Chinese automakers had their biggest turnout to date at the recent North American International Auto Show in Detroit, with displays by four automakers and one importer.
Two years ago, a single Geely Automobile Co. sedan was the first Chinese automaker on display at the auto show. Geely was absent last year but China's Changfeng Motor Group had on display a pair of small sport utility vehicles and two pickup trucks.
China America Co-operative Automobile Inc. -- known as Chamco -- said it plans to enter the lucrative North American market this year. The company is to enter the U.S. market later this year, followed by the Canadian market in 2009.
Chamco's sales target is 15,000 vehicles -- the company will sell a pickup truck and SUV -- when it comes to Canada, chairman and CEO William Pollack told reporters at the Detroit auto show.
The starting price is pegged at about $13,500 US.
There's worry an influx of cheaply-priced Chinese vehicles hitting Canadian streets could undercut domestic automakers in the market.
"It certainly can be a cause for concern,'' said Chrysler Canada spokesman Ed Saenz.
"We attempted to weather the introduction of a large number of Japan-based products 30, 40 years ago, Korean products in the last 10 or so, and at some point in the future, probably China and after that, maybe even India.''
Chinese automakers entering the North American market is but one of a number of hurdles facing the auto industry as a whole.
North American-based automakers must also contend with long-term market share loss to other Asian and European competitors, the strengthening of the Canadian dollar that's hurting most manufacturers that export to the United States, and a new round of labour negotiations with the CAW later this year.
"The danger is we're going to move to simply a consumer market without any production of vehicles. And it's that serious,'' Hargrove said.
"(Foreign automakers) are killing us and throwing a lot of people out of work and we can't get the government to do anything about it, unfortunately.''
The federal government imposes tariffs and trade restrictions on foreign manufacturers importing vehicles into Canada. Chinese vehicles would also have to meet federal transport standards before being sold in Canada.
Francois Jubinville, a spokesman for Trade Minister David Emerson, said Ottawa doesn't have a specific tool to limit the entry into Canada of vehicles made by Chinese companies.
"I don't think there's anything dramatically specific with respect to Chinese automobiles. You'd have the same tools at our disposal that we have with respect to any import,'' he said.
Some say it's just a matter of when, not if, Chinese automakers will get the green light to sell vehicles in Canada.
When that happens, Chinese automakers would be well-advised to look at South Korean company Hyundai's first forays into the North American market, said Tony Krajewski, a consultant in the automotive practice at Deloitte.
The small, rear-wheel drive Pony was a hit in the 1980s when Hyundai introduced it to the Canadian market. But Krajewski said Hyundai's best move was pairing an inexpensive car with one of the strongest warranties in the business.
The move allowed Hyundai to bypass the perception its vehicles aren't as reliable as their North American counterparts.
"That was a terrific stroke of brilliance on Hyundai's part,'' Krajewski said.
Geely said at the auto show it also plans to sell vehicles in Canada starting in 2009.
Chinese automaker BYD, which is also one of the world's top battery suppliers, said it will begin selling a plug-in hybrid sedan in China by the end of this year and wants to bring the vehicle to North America in three to five years.
