China Cranks Up Its Car Export Machine. Thank You, America. Merci, France
Quite ironically, foreign carmakers, namely GM and now French PSA, help China kick-start its ailing export machine.
Everybody had been hysterical about cheap Chinese cars that would soon flood the market, but it didn’t happen. Quite the opposite is happening: Joint venture brands, led by General Motors, are grabbing a larger and larger share of the Chinese market. And foreigners are gearing up to get China a chunk of the world market.
Car exports from China still suck. According to data released by the CAAM, China exported only 625,200 vehicles from January through September, and of those, only 346,700 were passenger vehicles. In the same time, China imported 728,700 cars, and most of them of the higher priced variety. This irritates the Chinese government to no end, but there is not much they can or want to do. At the Chengdu confab, officials officially admitted that the domestic Chinese car industry is not ready yet for the global market.
We have been saying it for a while: The only way to increase exports from China is to export joint venture cars made in China.
The company that had been leading this push oddly is General Motors, the company which still has shareholders in Washington and at the UAW for which Chinese exports are a – well – red flag. Early this year , GM started to export its made-in-China Sail. Only to South America, but soon also to Africa, Middle East and Eastern Europe. When we wrote about this, we said this would start a trend amongst of their joint ventures, and it sure did.
Reuters reports that joint venture with France’s PSA and China’s Changan has big export plans. According to the report, the JV “plans to sell premium cars in China, the world’s biggest auto market, and in some overseas markets.” Not cheap cars. Premium cars.
The JV will set up a research and development center to develop its own brand, as well as the Peugeot and Changan brands. And it plans to export all.
“It is the first joint venture to be allowed to set up an overseas production base and operate the export of multiple brands,” the company said in a statement.
The JV will most likely start with the Citroen DS line, debuted at the 2011 Shanghai auto show.
Swallowing the national pride and using foreigners as export vehicles makes sense for China. The same strategy contributed a lot to the Indian industry which turns into an export powerhouse, as we speak.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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First the Chinese will do joint deals... then, once they have mastered our technology, they will nationalize foreign assets, sell below cost, and then, after wiping out competitors, control the industry. China will have industrial jobs, and the US will have nothing but minimum wage service industry work. Winning!