With China continuing to make strides in the industrial world, American car manufacturers are bracing themselves for possible competition from the Chinese.

At the recent International Auto Show in Detroit, Chinese carmaker, Hunan Changfeng Motor Co. displayed its Liebao and Fiebao vehicles, which include a pair of small SUV’s and two pickup trucks. This follows the showing of another Chinese made car by Geely Automobile at last year’s international auto show. The fact that these companies had cars on display at the prestigious and popular auto show is seen by those in the auto industry as an indication that China could be targeting he U.S. market.

According the Associated Press American entrepreneur, Malcolm Bricklin, who was responsible for bringing the Yugo and Subaru to the USA, said “One of these days you’re going to see Chinese cars all over the place.” Bricklin wants to export Chinese cars from China to the U.S. as soon as 2009.

Although the demand for cars is very high in China, carmakers there are still eyeing the U.S. market. Chanfeng is currently manufacturing cars for the Chinese market, while facing competition from major U.S., European and Asian producers, many of whom have set up factories in China. Motor vehicle sales in China are expected to rise by 15 percent to eight million, up from an estimated seven million in 2006. In the meantime, sales in the U.S. are predicted to continue to decline in 2007 after falling from 17 million in 2005 to 16.5 million in 2006. However, some analysts see the fall in demand for motor vehicles in the U.S. as a shift from notorious high gas consumption vehicles like SUV’s. With China’s manufacturers focused on cars that economize significantly on gas, manufactures could make significant breakthrough in the U.S. while also meeting the growing demand in China.

Reports are that some U.S. car manufacturers have already entered into agreement with the Chinese to sell cars made in China worldwide. Since it is expected that the cost of shipping Chinese cars to the U.S. would be high, such cost would be minimized through partnerships between Chinese and American companies. The Associated Press reports that last month, Daimler-Chrylser Group and China’s Chery Automobile Group announced that they agreed on a plan for Chery to build small cars to be sold worldwide at Chrysler dealerships under the Dodge, Chrysler or Jeep names.

General Motors Corp. and Ford motor Co. also have significant manufacturing agreements with Chinese car companies, although these cars are not sold in the U.S.

When the Japanese entered the motor vehicle market back in the 1970’s there were doubts if Japanese cars would make a breakthrough in the U.S. market. It wasn’t too long before the Japanese vehicles were the vehicles of choice with American drivers. Although an AP-AOL Autos poll indicate that consumers are evenly divided if they would consider purchasing a car made in China, John Mandel, Senior VP for automobile operations for American Honda Motor Co. is reportedly said the examples of how Japanese and South Korean automakers established themselves in the U.S. market, provide a significant lesson on China’s potential.