The US sales strategy of the Chinese car company Chery was laid bare yesterday as US importer Malcom Bricklin gave the fullest briefing yet on his deal with Chery during a briefing to US financial investors, writes Rob Golding.

Malcolm Bricklin has commissioned three cars from Chery Automobile Company in Wuhu. They will be styled by Italy's Bertone or Pininfarina, powered by engines designed in Austria, have drive train developed in the UK and will be specified to aim at the heart of the German luxury brands.

Bricklin is investing through his company Visionary Vehicles. In 40 years as an innovator in the US auto industry he founded Subaru of America Inc and made Yugo the fastest-growing European import in history.

Now he has laid plans to rip a margin out of the lower medium luxury car sector - the most profitable of the lot. "We are going after the 3-Series BMW and the Audi A4," he told his audience.

The three cars for the US in 2007 at the latest are:

A four-passenger car as good as the A4 or better; a coupe aimed at the Mercedes 320CLK which will cost $25,000 compared with the Mercedes price of $45,000; and an SUV that provides a BMW X3 beater for $15,000 compared with the German's $35,000.

After that there will be a new car every two months "forever." Platforms will be fixed but the bodies will be changed in quick rotation to keep the products fresh.

In addition, the warranty offer will be for everything on the car for five years - even the consumables. "You'll have to buy your own gas," said Bricklin, "and you'll have to make sure not to damage it. But everything else gets paid for including the tyres and the windshield wiper blades."

There will be 250 dealers in the US. Bricklin presented to the first batch of 25 three weeks ago and 22 signed up to a requirement to put $2m into an escrow fund. Ultimately the dealers will have to sink $10m into the visionary process which requires all dealers to have a test track where the customer can drive anything they like and a cinema for running of a half hour movie that informs and entertains.

But the most demanding ambition of all is that the range will be hybrid "just as fast as we can get there."

Jack Perkowski is CEO of ASIMCO, an investment fund that has a holding in Chinese automotive component companies. He is selling $400m of parts to assemblers now and has five further factories under construction. He believes that China will face enormous pressure to make cars fuel efficient and environmentally friendly.

Because China is a nation of so many people with so much overcrowding it will become early adopters of new ideas, he says. Perkowski points to the transformation of telecoms as an example of the state's power in managing the generational shifts in technology. "Ten years ago there was a six month wait to get a landline installed. Investment in wired telephony was abandoned. Now anyone can get a cell phone."

Britain's Ricardo Consulting is developing the sophisticated hybrid/electric drive-train while the Austrian company AVL has been retained to develop the engines that meet emission standards.

Rob Golding