The 101st North American International Auto Show, often referred to as NAIAS, or simply the “Detroit Auto Show,” was held last month from January 13-27. Since 1961, this annual event has been held at Cobo Center in downtown Detroit where it occupies 1 million square feet (93,000 square meters) of floor space. NAIAS 2008 welcomed more than 700,000 attendees to the show, 6,000 international media from nearly 60 countries, along with 37,000 industry insiders from 2,000 companies. At this year’s show, 58 vehicles were unveiled, of which 44 made worldwide debuts and 14 were shown for the first time in North America.

Before 1957, the Detroit Auto Show was a purely American affair. In that year, international auto manufacturers displayed their cars for the first time. Joining the domestic models from the Big Three were models offered by leading European producers such as BMW, Jaguar, Mercedes-Benz, Porsche and Volvo. By the 1980’s, the show had become one of the world’s biggest, in terms of status and the sheer number of vehicles on display—and it had become more international in scope. Both Toyota and Nissan chose the NAIAS as the stage for the worldwide introductions of their new Lexus and Infiniti luxury divisions.

In 2006, the Detroit Auto Show welcomed for the first time an automaker from China. The small silver sedan that Geely Automobile Company displayed outside Cobo Center in that year attracted numerous representatives from automakers and the media. With all of the buzz about Chery’s plans to enter the U.S. market, everyone was curious to see what a Chinese car looked like.

In the most recent show, Chinese car companies participated for the third straight year, and this time, there were five representatives from China’s fast growing auto industry present. Geely, Changfeng and BYD displayed models ranging from compact sedans and SUV’s to a plug-in hybrid, and Chamco Auto, the American partner of Zhongxing Automobile, and Li Shi Guang Ming Automobile Design made their first appearances in Detroit. Geely showed six models, including the CK1 Freedom Cruiser, a budget compact sedan; Changfeng offered four models, including the Liebao CS6 SUV; and BYD showed models including the F6, featuring its hybrid drivetrain. Not only did BYD bring a cutaway model of its plug-in hybrid system to demonstrate how it all works, the company’s chairman gave a spontaneous test drive on the show floor. BYD says the car will go on sale in China this year.

While Chinese car makers are becoming active participants in the Detroit Auto Show, the hurdles to penetrating the United States market are significant. Much engineering work remains to be done on Chinese vehicles to meet U.S. regulatory specifications for safety and exhaust emissions. Chinese cars also need improvement in terms of fit and finish and overall engineering refinement. On top of that, an even larger task involves developing a distribution and dealership network in the U.S., a considerable undertaking when starting from scratch with an unknown brand. Nonetheless, U.S. industry analysts and executives are getting used to the idea that as far as cars from China showing up on U.S. roads, it is only a question of “when” not “whether.”

For their part, most Chinese vehicle makers are wary of entering the United States market too early, and say their presence in Detroit is only a way to test the reaction of consumers and to get a first-hand look at how they stack up against the competition. Many admit they are years away from committing to the U.S. and will first look for growth close to home. Subsequent entry and expansion plans are likely to target emerging markets such as Africa, South America, and Eastern Europe, where the regulatory environment is less strict, the lack of brand recognition is less important, and a low-price product strategy can quickly create a new market niche.

This strategy appears to be working. In 2007, China exported 612, 380 vehicles, a 78% increase from the the previous year. Within the vehicle category, exports of passenger cars reached 264,501, more than double the number exported in 2006.

Two of the Chinese car companies with the best prospects of entering the United States auto market did not even participate in the Detroit Auto Show. Chery, which has a contract to manufacture subcompacts for Chrysler, will be getting a crash course from Chrysler in how to meet U.S. safety and emissions requirements, and must be considered a favorite to begin supplying cars to American consumers as a result. Also, China Brilliance has passed quality tests in Germany and has signed a contract with a dealer to sell 100,000 cars into the German market over the next five years. Brilliance exported 1,900 cars to Germany last year, and is targeting 6,000 units in 2008.The model being exported is the “Zhonghua Zunchi” which is powered by a 2 liter engine made in China. If Brilliance can meet Germany’s stringent requirements, sales to the US market cannot be far behind.

Despite concern for the North American vehicle market in 2008, the Detroit Auto Show was considered a great success. Automakers seemed encouraged by the many opportunities offered by globalization and the wide variety of new technologies on display. With more representatives from China, the fastest growing automotive market in the world, NAIAS continues to evolve into a truly global event.

The dates for next year have already been set. The 2009 Detroit Auto Show will be held from January 11-25 in Detroit. Book your tickets now!