By on February 22, 2013

Max Warburton and his team. Warburton, of Bernstein Research, assembled a team to interview over 40 auto executives in China (both Chinese and foreign-born) and even bought two Chinese vehicles from Geely and Great Wall. Warburton had them shipped to Europe, where they were taken to a test track, driven extensively and then taken apart by engineers and automotive consultants. And it was far from pretty.

Warburton and his gang have assembled an epic 200-plus page report that is one part primer on product development, one part spotter’s guide to the Chinese domestic car industry and one part road test feature that rivals anything out of the buff books or Consumer Reports. It is dense, fact-filled and will take a few solid hours to read and absorb.

The first 64 pages are devoted to the ins-and-outs of the Chinese auto industry. Warburton deftly takes us through the various players and their broken-English monikers (Great Wall, Chery, Brilliance and the like) along with thorough dossiers on each one. Who is in bed with whom, which JVs are successful and even interviews with executives where they are asked to praise and criticize the various Chinese auto makers. The consensus seems to be that SAIC is miles ahead of everyone else – thanks mostly to their collaboration with GM.

One OEM executive who had recently left GM China argued that part of the problem was that the international OEMs do not take their responsibilities to the joint ventures seriously — GM being the only exception. What does it take to ensure a joint venture is successful and benefits the Chinese side?

I was part of GM when they put a lot of effort into China…I used to see Rick Wagoner (CEO) in China almost every month…he really spent a lot of time here, especially with the politicians…and they spent millions in the Chinese universities to be good citizens. They’ve built a styling studio, they’ve built a RMB1.6 billion proving ground, they’ve sent their best products to China. They’ve built the engineering function — they went from 400 engineers in 2005 to 2,000 in 2008, now they’re at 2,500. They have a 100% capable engineering center. They are really serious. You need to be serious here. But a lot of [foreign] OEMs are not.

Also in the good books is Great Wall. Along with advanced engineering prowess, Great Wall pays their supplies and vendors on time – apparently, a major issue among the design consultancies and foreign-born experts that, according to Warburton, are responsible for the vast majority of what China’s auto industry does right.

The individuals that Warburton interivews from the engineering firms tend to be extremely bearish on the Chinese auto industry. Managers are largely drawn from the Politburo, engineers are portrayed as incompetent and cutting corners is said to be a way of life. According to one executive, “…a mistake is only a mistake if you are found out.” One auto insider believes that most Chinese sedans of the recent era have been reverse engineered copies of the Toyota Corolla. They key dimensions and “hard points” are identical, and he believes that frankly, the Chinese auto industry is not yet capable of engineering its own car from scratch. Furthermore, they are obsessed with matching VW shot for shot, but their thrifty nature and impatience inevitably hampers their success.

They are all obsessed with matching VW — but we would generally advocate that they would be better going for a twist beam rear suspension with three components, with little to go wrong — rather than a multi-link with 20 that they will then screw up putting into production…to emulate VW or Ford they need to control tolerances within an incredibly tight range — and they end up a long way out.

Along the way, we find out that while Toyota and VW spend in the neighborhood of close to 10 billion dollars on R&D annually, Chinese companies spend around $100 million, largely a combination of stinginess and not having to do so thanks to reverse engineering existing technology. A high-speed drive across a 22-mile bridge illustrates tangible results of this corner cutting.

Later that week, we meet Frank Zhao, Geely’s head of R&D. We mention the Geely EC8′s apparent lack of crosswind stability and ask how much time the car had spent in the wind tunnel during its development. Mr. Zhao is honest, and admits that Geely doesn’t have a wind tunnel (there are only two in China), and that due to alimited product development budget, he needs to choose where to spend his money. Mr. Zhao explains that Geely made the decision not to hone the EC8 in a wind tunnel, because most customers don’t leave cities and very few drive at high speeds on bridges. The money was instead spent on electronic features (satellite navigation, etc.) and solid basic engineering (and we concur, as the body seemed rigid, and noise, vibration and harshness [NVH] were well controlled).
A ride in an EC8 encapsulates where Chinese automobile development is right now. The basics are okay. The cars are adequate. But they are not world-class, in our opinion.

Around page 71, the fun begins, as the team procures, imports and test drives two Chinese cars, the Geely EC7 and the Great Wall H5. Rather than spoil the results for you, I encourage you all to pay close attention to the teardown portion, for an utterly fascinating look at the ins and outs of a Chinese car. There are certain elements that were highly-praised; the Geely’s body-side panel, stamped from one piece, was described as “deeply impressive” and “beautiful” by European engineering consultants. But the engineers and test drives found manifold faults with the car; shabby spot welds, malfunctioning HVAC systems, corroding parts and body panels after just a few hundred kilometers. Ben Oliver, one of the UK’s best auto journalists, was brought in to give his perspective. He declared the Great Wall to be dreadful.

The report seems to conclude that it will take a minimum of a decade before the Chinese are ready to field a competitive product. They are not functioning anywhere close to as competently as a Western auto maker, and the foreign hired help brought in to make them succeed are quickly getting frustrated with the lack of progress and poor attitude.

But Warburton and his team, upon inspecting the Great Wall H6 (successor to the H5) come away impressed with the progress that’s been made. The body-on-frame construction, thirsty Mitsubishi engine and crude engineering appear to have been jettisoned in favor of a much safer and more efficient crossover. Warburton notes that this kind of progress would take a few product cycles at traditional OEMs in past eras and comes away impressed. ” It’s clearly a significant leap forward versus the H5,” says Warburton. “If this is what Great Wall can achieve in 15 months…then it may be building a Bugatti Veyron rival by 2014.”

EDIT: Bernstein requested that the report be removed. The report was generously provided to TTAC but it was not meant for mass dissemination. We apologize for the misunderstanding.

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91 Comments on “EXCLUSIVE: Bernstein Research Literally Dissects Chinese Cars, Auto Industry In 200-Page Report...”


  • avatar
    Junebug

    Anybody surprised? They’re communist! Old Russian saying – we pretend to work and they pretend to pay us. If you haven’t seen the Top Gear UK episode where James and Jeremy go in search of great communist cars, you really missed a treat.

    • 0 avatar
      Summicron

      But there’s big-ass money being made in China by a lot more people than were ever in the old nomenklatura of privileged Ruskies. That’s why they’re such a dangerous honey-pot for everyone else’s economy. And they’re obviously using the high-tech flies they catch to become real players in competitive industries.

    • 0 avatar
      european

      @Junebug

      and did you see the TG UK episode where Jeremy says that the
      Ford Mustang Shelby is pure crap when driving over 70 miles/h
      because it rattles like a tractor?

      or did you see the Fifth Gear UK episode when they gave the LOWEST EVER rating for the Chrysler 300C of 11 points out of 40?

      anyways, draw your own damn conclusions.

    • 0 avatar
      icemilkcoffee

      I don’t know if you are kidding or not, but China hasn’t been communist for years now. Don’t confuse capitalism with democracy.

    • 0 avatar
      tatracitroensaab

      You’re missing the point with the Russian car industry. Their vehicles were not meant to be smooth, advanced, or even reliable — they were designed to be simple, durable, and easy to repair. There is a reason that the Lada classic is one of the most produced cars of all time, and why it was only retired last year — it fit a need that other cars couldnt fit. Few could match its inexpensiveness/durability/ease of repair. Have you seen some of those eastern european road conditions??????

      as for china, I would argue that they are more capitalistic we are — their people have more faith in capitalism and its clear in what direction they are moving. Yeah their cars are currently crap, but the entire country was a backwater ten years ago and has since moved forward, while the united states has stagnated…

      • 0 avatar
        gtemnykh

        There is much truth to this. When the Soviet Union was selecting a Western car to mass produce, they extensively tested various models (Peugeot, Fiat, etc). The Fiat 124 fell apart in 2 weeks on the proving grounds, it was simply not up to the task of dealing with Russia road conditions. The unibody actually cracked in some structural areas! Soviet engineers made a plethora of changes, including thickening up sheetmetal, ‘dumbing down’ some of the fancier features, increasing suspension travel greatly, and fitting a hand-crank starter. The end result was a car that looked just like a 124, but had lost a lot of the Italian car’s delicate sporty handling in exchange for anvil-like durability.

        We rented a 2107 built by “Ros-lada” (different than the AvtoVAZ factory in Togliatti) back in 2006 to drive from Novosibirsk to Biisk, and then through the Altai mountains to the Aktru glacier. Beneath the squared off sheetmetal was the same old 124-based Lada 2101. With just 1000km on the odometer, the car has some serious build quality issues: exhaust leaking into the cabin, several inoperable seatbelts, It’s hardly worth mentioning the wiring that hangs down from behind the dash and the general slap-dash fit and finish. The Togliatti cars are built better, but still terribly crude even by 1980s US standards. 74hp carb’d 1.5L with a non-overdrive 4spd with manual choke.

        We crammed 5 grown guys into this little tin can, along with multi-day packs and a tent for hiking up the glacier. We then proceeded to drive this incredibly overloaded car up mountain passes, and on terrain reserved for lifted 4x4s here in the US (including fording a few streams). It wasn’t particularly comfortable, but the Lada was unfazed. The only damage was a crushed jacking point where a boulder on the trail left its mark. We hit a pothole so deep that the front of the car dropped down and hit the pavement with the oil pan. The sound was god-awful, we thought we were through. All the thick cast iron oilpan had to show for this was a small scuff! Despite sagging down in the back, we never even bottomed out the suspension!! My respect for these old cars grew immensely after that trip.

        • 0 avatar

          I had similar experience driving Lada 2108 (it is more modern 1980s design FWD car similar to Golf or Escort and actually was fun to drive with stick and quick steering and it had overdrive too). Once I decided to take shortcut around Dmitrov (city in Moscow region) because of traffic and took unpaved back road. My car was loaded with four guys and some cargo. Man was I scared! It was a perfect trail for Jeep fans and modern SUV drivers would not tolerate risk taking this road. But there was no way back and I did not want to look like a wimp so I charged ahead. Occasionally I had a feeling that car will turn over and at some point I heard something to hit bottom of the engine but car continued unfazed. After the trip I looked under the car and saw the dent on the oil pan but car was still running as nothing happened. Russian cars (as well as old school American cars) have some tank like quality about them. European and Japanese cars are more suited for urban conditions.

          • 0 avatar
            CJinSD

            I spent much of the mid ’90s traveling around ‘developing’ areas where Toyotas were taking over from Ladas, Land Rover 88s, Mercedes-Benz 220Ds, and Valiants. Many of them were RHD cars exported from Japan rather than being re-certified when their first-world lives were up. I’ve also seen obscene off-road abuse heaped upon junker Japanese cars by people who intended to destroy them but who had a change of heart after seeing how much punishment they could take. I’d put a Tercel or Corolla up against anything from Eastern Europe.

          • 0 avatar
            gtemnykh

            CJinSD, I have to agree with you atleast partly. We’ve done the same route in a super-beat up RHD ’94 Corolla, same offroad, same stream crossings(infact the water was higher that time, coming over the hood of the Toyota). This particular model was a stripped out delivery version of the station wagon, 4spd manual, leaf spring rear beam axle, and the ubiquitous 4AFE engine. This same model seems to be a particularly popular import to Afghanistan. Ironically enough, the Corolla was the one that stranded us briefly after the ignition fell apart from all of the shaking/vibration and abuse. A several hour crash course in hot-wiring had us back on the road.

            The Toyota was much nicer on the paved sections of road, with taller gearing, more power, more room, etc. Considering how abused it was, the fact that it had a no-start failure is not something I hold against it. But the same repair would take half as long on a ‘classic” rwd Lada.

      • 0 avatar
        avens

        Registered an account here just to reply to your comment: Chinese cars are the opposite of simple, durable and easy to repair. Actually the Chinese market likes cars that are the antonym of what you described and objective testing shows their flaws, including the 202 pages research this thread is about.

        And lets be honest, on the western civilization Lada is considered to be one of the worst manufacturers of all time.

  • avatar
    Summicron

    Fantastic, Derek. Can’t believe we can read this for free. Thanks for the link.

  • avatar
    otter

    @Junebug, China is Communist only in the sense that the ruling party is called the Communist Party. Its economic system is very much capitalist, if at the same time statist (there are many forms of capitalism, after all.)

    This looks like a fascinating article to make time to read; thanks for posting this.

    • 0 avatar
      Piston Slap Yo Momma

      China is the worst elements of capitalism & communism, a nightmarish mashup of an apocalyptic environmental capitalist disaster with the cog-in-a-machine human rights you get with communism. If there was a way we could cut all economic ties with China I’d say pull the plug. Problem is with the US’s shrinking middle class and a gov’t that’s beholden to Big Business, we’ll eventually look a like China.
      Oh, and Chinese cars suck.

    • 0 avatar
      silverkris

      In fact, business people join the Chinese Communist Party for the networking opportunities, since the government still has a lot of say on what they can do, and to look out for policy changes that may affect their commercial prospects. Mao definitely is turning over in his grave.

      • 0 avatar

        How it is different from crony capitalism in United States? Obama essentially rules like a czar or communist dictator. Boeing is not allowed to build plant where it desires. US government sues S&P just because they downgraded US credit rating and GE is in bed with government and surprise – unlike competition GE does not pay taxes and list goes on and on.

    • 0 avatar
      danio3834

      A communist will take your money if you offer it. He’ll just impose all kinds of rules on you while doing it.

  • avatar
    mcarr

    Looks like the file has been taken down.

  • avatar
    schmitt trigger

    “Looks like the file has been taken down.”

    Indeed.
    Hopefully, someone will provide additional summaries.
    Derek’s write up leave one lusting for more, more more!

  • avatar
    brettc

    Glad I was able to download it while the link was still there. I’m on page 30 and it’s fascinating so far. I don’t think we have to worry about Chinese cars for a while based on the Chinese work ethic and lack of creativity amongst the Chinese that’s in the report. Although it sounds like if/when a Chinese branded car is ever sold here, it’ll likely be higher quality than a 1986 Pony.

    • 0 avatar
      carnerd84

      Hey unfortunately I wasn’t that lucky and the report was already gone. I am just writing my master thesis and was looking forever to find something like this report. And now it’s gone. -.- I usually don’t like trolling people on the internet but you would really save my life if you could send me the report somehow.

  • avatar
    wmba

    Very interesting writeup.

    And Geely owns Volvo – at least they’re putting in a brand new R&D center in Gothenburg, Sweden. Perhaps that’s why they can only spend 29 cents on aero for the Chinese home market EC8.

  • avatar
    Autobraz

    Derek, if the file does not become available again, would you please write a second part to this article? Thoroughly fascinating.

  • avatar

    Since the report was removed, please provide more detail on the disassemblies. Please.

  • avatar

    In Brazil we have had experience with Chinese cars for 3 or 4 yrs now. A picture is emerging. I’ll give you some of the highlights:

    - JAC. Came in and started selling alot of cars at a good price point. The leading auto mag here bought one for their long term test. Despite some electronic gremlins early on, when they pulled the car apart at 60k km they declared it well put together. Not 3 editions later, they ran a story where JAC owners complained of rusting on newish and almost brand new cars. On the hood, wheelwells, hatch. Other sites have showed constant problems with door latches, power windows, ACs. So it seems the basic engineering is there, but little attention to detail and finishing.

    - COmmercial vehicles. When they first came they took the market by storm. Seemed liked every small business bought one. Soon, they were being abandoned in droves. Though the initial cost of purchase was deemed ok, as were maintenance costs, downtime was too much to bear.

    - Those are the big sellers so far. Chery’s QQ and CUV did well initially. Again, basic stuff ok, but the finishing is so bad that the cars are very tough sells in the secondhand market.

    From what I see, I agree with the report. JAC cars for instance. They start, they go, they brake. But there’s no finesse. The lack of finesse is visible on highways for eaxample. You see them, but you can see the drivers are struggling to keep the cars on the road. You can see excessive body motion in curves, on all but the most perfect asphalt they bob and weave.

    I’ve said it before on TTAC. The Fiat people I talk to were initially very scared of the cars. THey bought some, tested them. ANd they told me not to get near them. They just aren’t ready. Interestingly, they talked about the same time line as the report. In 10 yrs the story could be radically different.

  • avatar

    Gents,

    The report is proprietary and not meant to be shared. The sale of this research is Bernstein’s business and I am not going to hinder that. I’ll be chatting with Max tomorrow and hopefully, there will be continued coverage of Bernstein’s work.

  • avatar
    icemilkcoffee

    Not ready for prime time. To be fair though- we should subject all other cars to this type of tear-down analysis. The chinese manufacturers are not the only ones cutting corners. Every manufacturer cuts corner. The big boys just do it somewhere you can’t easily see.

    • 0 avatar
      Autobraz

      “The big boys just do it somewhere you can’t easily see”. One of the characteristics of a company experienced in the game. If a quality issue is not perceived (perceivable) by a customer, it is not a quality issue!

    • 0 avatar

      If I had the funds and a facility to do so, I would. The OEMs all do it en masse.

      • 0 avatar
        Athos Nobile

        No need to. There’s a specialized company in Europe that does that, for a fee of course.

        It is a resource that is tapped by both OEMs and suppliers. No need to tear down a car in house anymore.

        I can’t recall the name ATM, but I have the site in my postgrad lectures from last year.

        Shot me an email if you’re interested in having a look.

        • 0 avatar
          hf_auto

          It’s A2Mac1 and we’ve only found them to be mildly useful at my company.
          We usually end up leasing/renting/purchasing vehicles anyway for teardowns, or visiting dealerships and taking pictures. You learn a LOT from teardowns that doesn’t go into these reports.
          It’s rare to find the exact vehicle you want in the database, and when you do they’re not all fully benchmarked so you’re not guaranteed to find what you want.

          • 0 avatar
            Wirey1

            hf_auto beat me to the punch.

            A2Mac1 takes a photo set of every vehicle they do from a fixed set of locations. It sounds great in an apples-to-apples sense. But for convoluted parts (like wiring!) that are often obstructed by other components, the standard photos can be limiting and frustrating.

            As for the rest of their services, I don’t have any experience. But feel free to read about ‘em. Their Detroit office is in Ypsilanti, just up the road from Sam’s Club.

            http://www.a2mac1.us/home/automotive-benchmarking.asp

  • avatar
    HiFlite999

    Interesting in light of the Chinese government’s official effort to steal technology via hacking.

  • avatar

    “The body-on-frame construction, thirsty Mitsubishi engine and crude engineering appear to have been jettisoned in favor of a much safer and more efficient crossover.” — sounds like Consumer Reports dissecting Jeep Wrangler before Pentastar

  • avatar
    deanst

    Well, my weekend is now planned – Toronto Auto show and this report!

    (By the way, I guess you only received Part 2; Part 1 of the report is another 347 pages.)

  • avatar
    philadlj

    “Geely doesn’t have a wind tunnel (there are only two in China)”

    Wow. Just…wow.

  • avatar
    tedward

    I really wanted to see that report, should have downloaded it this morning I guess. Please make the argument to Bernstein Research that this is a great name building exercise. With all of the press hits and links this article is getting I think they have more to gain here by showing off their product than by keeping it behind a paywall. After all, how can anyone propose their employer become a client without an example of what they could be buying? Also, as a general rule I will not pay for anyone’s first work in front of me, not unless I go shopping for it specifically.

    I could see this becoming a repeat business opportunity with all the interest generated. As in, revisit the topic in a year or two with a follow up report, which by then would be eagerly sought after by paying customers. They could try to establish themselves as a sort of serial authority on the Chinese market export potential.

    • 0 avatar
      hf_auto

      Nielsen Norman does that and it seems to be working well for them. They publish free articles, and release some of their bigger reports for free. That drums up interest in full reports and hiring their consulting services.

  • avatar
    infinitime

    This is really interesting. Having had some first hand experience with Chinese cars in its home market, I am at once in agreement and skeptical about some of the findings.

    There appears to be a common theme in most “Western” assessments of Chinese cars.

    The first observation is that they consistently look at smaller second tier (sometimes third tier) manufacturers, who are not really up to snuff, even in their home markets.

    Companies like Geely, Chery, Landwind, Great Wall, Soueast, Trumpchi, JAC are all bit players, often supported by a core constituent with a vested interest.

    Chery for example, is heavily backed by the government of its home province, Anhui. Its crosstown rival JAC, is a truck manufacturer that dabbles in making passenger vehicles. It too is also provincially owned. Both build cars as much to meet political objectives of low unemployment figures and regional pride, as it does to actually make a profit.

    Landwind, manufactured by the Jiangling Motor Holding Ltd., is closely tied to the Chinese military (which acts more like a large commercial conglamorate in various sectors).

    Trumpchi is based in Guangzhou, and is indirectly supported by the local government, with the aim of diverting federal funding to automotive-sector development in southern China. Given the more convenient access to heavy industry infrastructures in elsewhere, and the higher labour costs in coastal southern China, there is little reason to manufacture cars there, other than political regional interests.

    The fact that western automotive publications focus on these smaller manufacturers present a distorted view of the Chinese automotive sector as a whole. It would be akin to someone commenting on the Japanese automotive sector, looking only at Suzuki and Daihatsu, to the exclusion of Toyota and Nissan.

    While is it is probably true that SAIC is one of the top state-owned manufacturers, I can’t see their products as being considerably better than the OTHER two large state-owned entities, DongFeng (Nissan’s JV partner) and FAW (JV partner of Audi and Toyota, amongst others).

    You will note that these companies (with the exception of GM-SAIC-Wuling’s recent venture into the Indian market) had decided to not export. This is not a coincidence. These companies (either through their own brands or the JV brands) have a captive domestic market. They KNOW the challenges in having to compete with global players outside of China. They also march to a government mandate to not export until they are ready.

    These limitations are not imposed on the bit-players, many of whom see exporting to third world countries as they only way to survive. The reality at home is that with increased consolidation, they would not be able to survive in a mature domestic market. By exporting to the emerging markets in the Middle East and Africa (where both emission and safety standards remain lax), they stand a very good chance of being able to compete on price, even if their products are less than stellar.

    Did you catch the news footage of the civil war in Libya? Notice that in addition to the Toyota trucks, Chinese truck maker Zhongxing seems to be making a rather strong presence for both government and rebel forces? Why would anyone pick a Chinese Isuzu knock-off over the legendary Toyota Hilux? At 1/3 the price new, there are many willing takers.

    http://www.pakwheels.com/forums/news-articles-driver-education-safety/161082-chinese-trucks-replacing-hilux-choice-truck-rebel-groups-2

    The point is, while the Bernstein report makes for entertaining reading, it is a small sampling of two units from two smaller manufacturer, which are not all that impressive even in their home markets.

    Maybe Bernstein can disassemble a Dodge Avenger, to assess the current state of the US automotive industry.

    • 0 avatar
      Summicron

      “Your comment is awaiting moderation.”

      Because I use too many commas?

    • 0 avatar
      tentacles

      A small correction. “Trumpchi” isn’t a bit player in the vein of Jiangling, it is a sub-brand of Guanzhou Automotive Group (GAC), one of the largest carmakers in the country who also own the GAC Honda, GAC Toyota and GAC FIAT JVs. They are an SOE belonging to the municipality of Guangzhou, and considering they basically do half of all Hondas and Toyotas in China and will almost certainly be doing all of FIAT/Jeep/Chrysler right up there with SAIC and FAW in terms of clout. Their cars (well, the one car they’ve been making) is based off the old Alfa Romeo 166 chassis which they legitimately purchased from FIAT and is supposedly quite good.

      You can put them in the same category as FAW Besturn (based on legitimately bought Mazda technology) or that BAIC built SAABs.

    • 0 avatar
      SilverHawk

      From my own experience, I generally agree with your assessment.
      One of the hottest rumors currently making the rounds is the possible, gradual exit of the state from the industry, completely! This would be an all out attempt to get the consolidation jump started, as mergers would be the obvious survival strategy for many companies. The ensuing blood bath would certainly keep the Chinese out of Western markets for years to come, but would eventually create competitive companies with greater export potential. If the loss of jobs could be managed without too much hardship, I could see this being tried. However, the CCP rests it’s hat on economic progress, and the risks are scary.

    • 0 avatar
      niky

      Geely is NOT a bit player. It’s number two in China right now in terms of passenger vehicle sales. The Great Wall H5 is one of the best-selling cars on the market, if I recall… at the very least, it’s the best selling SUV.

      I’ve driven DongFengs, LandWinds, JACs and etcetera and was generally unimpressed. But Geely… after having seen the new Geely products at a trade show and having test driven the LC, I think they’re one of the few companies with a firm grasp on how to move forward.

      The report might not reflect what the Chinese drive… crude, cloned trucks and old Western designs… but it reflects what the Chinese will export. And that’s much more important for the rest of the world.

      • 0 avatar
        infinitime

        Geely’s only entrant is the Emgrand EC7, which ranked 16th in sales domestically in 2012:

        http://bestsellingcarsblog.com/category/china/

        It is nowhere close to being in second place. It is well behind the JV foreign-branded models, all of which are manufactured by the Chinese “Big 3″ of SAIC, FAW and DongFeng.

        • 0 avatar
          niky

          We’re talking in terms of locally-designed and produced cars. In which case, Geely, with well over 400k units (and over half a million internationally), is only behind Great Wall.

          The EmGrand, if I recall, is the most popular locally developed car in China. Number 16 behind the Japanese and American imports is pretty impressive, if you ask me.

          The report is not overly concerned with joint-venture products and licensed clones. What they’re looking at is locally developed cars that sell well. This is what tells us what China will be exporting to the rest of the world, and what their actual capabilities are in respect to foreign manufacturers.

    • 0 avatar
      th009

      ZX (aka Zhongxing) is tiny, with only 110K unit capacity. But I had the misfortune of renting a nearly-new ZX Grand Tiger pickup for a week last month.

      Within a week, a battery cable worked itself loose, the latch on the centre console broke, clutch pedal made horrible squeaking noise to wake the dead and random screws were found on carpeting multiple times. And all hinges, including the tailgate, were sloppily slathered with lithium grease that inevitably found its way onto clothing. I won’t even get into build quality or materials.

      It’s cheap, and maybe it worked well in Libya — but I do wonder for how long.

  • avatar
    CoreyDL

    Hmm, here?

    http://www.blogowogo.com/blog_article.php?aid=4705069&t=15

  • avatar
    niky

    I think Geely is doing fantastic work on such a limited budget. They’ve gotten the NVH issue licked better than most of their competitors, they’ve built cars that are reasonably solid, and the electronic design process allows them to move pretty fast on very little money.

    Perhaps the final step left for them to take is to drop Chinese subcomponent suppliers for export models.

  • avatar
    Von

    I haven’t commented here for a very long time, but I just wanted to say that if this happened in China, by a Chinese person, the B&B would be screaming bloody murder, or at least, intellectual property foul play.

  • avatar
    PCP

    ‘Chinese companies spend around $100 million, largely a combination of stinginess and not having to do so thanks to reverse engineering existing technology.’

    Then they simply buy technology from other companies (i.e. Volvo).

    Last but not least, they heavily rely on hacking groups like APT1 to procure them some more know-how that would take them decades to develop by themselves.

  • avatar
    raded

    “Around page 71, the fun begins, as the team procures, imports and test drives two Chinese cars, the Geely EC7 and the Great Wall H5. Rather than spoil the results for you, I encourage you all to pay close attention to the teardown portion, for an utterly fascinating look at the ins and outs of a Chinese car.”

    I’m disappointed to see that the report was removed. Can we get some highlights of the teardown since we can’t see the report?

  • avatar
    lowsodium

    Trying to find this everywhere on google. Hopefully it will pop up soon.

  • avatar
    gslippy

    Fascinating summary.

    Quite a cultural difference between the Chinese/communist approach and the Japanese approach in the 50s-70s.

    The Japanese were/are motivated by Deming’s ‘pride in workmanship’, while the Chinese motivation is the initial sale. I don’t expect this to change any time soon.

    Actually, this sounds a lot like the US car industry in the 1970s.

    • 0 avatar
      Paul W

      Finally someone who understands that just because the Japanese were struggling initially and then went on to dominate the automotive world, the Chinese selling a bad product now is not evidence that they will make the same journey.

      China is not Japan (or Korea).

      • 0 avatar

        And America is not a Germany or England. So then what – America suck and cannot make world class cars? Koreans also are not Japanese but still beat them in every turn. Regarding Deming’s ‘pride in workmanship’ I do not see Americans caring about it any more than Chinese.

    • 0 avatar
      blowfish

      absolutely going for the good time but not long time Amen.

  • avatar
    probert

    “It’s clearly a significant leap forward versus the H5,” says Warburton. ” I’m wondering if using the term “leap forward” is politic in a report about Chinese industry. A little humor, perhaps, in a serious report?

  • avatar
    phreshone

    If someone starts importing Chinese made cars en masse, you’ll see the return of undercoating/rustproofing as a major dealer option again. Chinese metallurgy and steel production is way too low quality for auto production. (it will be real interesting to see what a 2012 Honda Fit looks like in 2 years, or did they ship steel into China for stamping)

    • 0 avatar
      corntrollio

      Is there any evidence that undercoating/rustproofing from the stealership actually made a difference? My impression was that it was a zero-value add-on that made pure profit for F&I.

      I have seen evidence that *aftermarket* rustproofing, such as oiling the cars, as they often do in Canada, worked, but never the dealer add-on crap.

      • 0 avatar
        jpolicke

        The in-laws went for the Ziebart treatment years ago on their ’77 Volare, which was bad enough to rate a recall/special trade-in allowance. It smelled like a melted Crayola, but when they got rid of it in ’84 there was not a speck of rust on it.

  • avatar
    Big Al from Oz

    Below is an interesting link regard Chinese vehicles.

    The reality is the Chinese economy will eventually surpass the US and Eurozone combined and that’s during some of the contributors on this site’s lifetime. By that time the Chinese will have to become a capitalist democracy or it will fail.

    I do understand people’s concern about China, but we have to work at ways to integrate with them, especially economically.

    Chinese vehicle trends will eventually play an important role in all of the vehicles globally.

    Imagine in the 1950s someone saying that Japanese and Euro technology and design would impact US vehicles significantly. You would have been laughed at.

    I figure within 10 years Chinese vehicles will be equivalent to other Asian producers in quality, but still cheaper.

    The Chinese will do what the Europeans did a couple of centuries ago and what the US did recently and that is to flex its economical muscle to influence.

    http://www.carsguide.com.au/news-and-reviews/car-news/chinese_cars_outselling_premium_brands

  • avatar
    Big Al from Oz

    We haven’t seen the reliability issues here in Australia as bad as some of the comments posted.

    Is it a case of do you get what you pay for?

    Or, is a case of the suppliers in a country not providing adequate quality control themselves and assiting with the development of the vehicle.

    We have the Great Wall ute here and it has had a couple of problems. They appear to be selling quite well and they have been on the market here for years.

    The Great Wall ute is a reverse engineered vehicle using a Toyota Surf chassis, Izuzu body and it used to use a Mitsubishi drivetrain.

  • avatar

    Who is Jeremy Clarkson and why do we even care about his opinion? There are hundreds of journalists in the world and every one has opinion. Chinese are dynamic society and they are learning extremely fast. They are taking world by storm while British and other Europeans including Russians are insolvent and slowly dying societies. If I remember correctly Japanese and Korean cars were considered to be a crap some time ago and that dude Clarkson most likely rated (and I bet still does) them as a crap. It is interesting to know though his opinion about British cars. Oh, forgot there are no more British cars. Wasn’t Rover piece of crap imitation of Honda Civic?

  • avatar
    blowfish

    Mr. Zhao explains that Geely made the decision not to hone the EC8 in a wind tunnel, because most customers don’t leave cities and very few drive at high speeds on bridges.

    is like telling a bunch of Pygmies( who spend their entire lives inside the forests) about Pyramids, horses & buffalos.
    as they coming up close to these big objects they swear is witch crafts u’re pulling on them. this was a true story read from a intro psych text book thirty some yrs ago!

  • avatar
    blowfish

    The report seems to conclude that it will take a minimum of a decade before the Chinese are ready to field a competitive product.

    no problem as long as they can fly off the shelf or sold like hot cakes in middle kingdom who cares. I bet with the crawling speed one car get away with a 1 cyl 3 hp tecumseh lawn mower engine. when merc selling a/c sedans in hk they were not worry about power but worry about cooling power in a giant moving parking lot. they need extra large rads and the jap cars were quite ahead of them then.

    or during the old days most cars made in US of A were designed to go straight and get away with a steering lock on the centre position. since roads here are as straight as an arrow. fast forward a bit soon we got diluted with Vee Dubs & porsches we start to ask questions as why our land barge cant really turn as well as them small cars?
    has anybody tried taking exon valdez to a marine slalom course? probably took 20 miles to bank left to right and with the aid of 20 tug boats to push on the sides.

  • avatar
    blowfish

    It’s cheap, and maybe it worked well in Libya — but I do wonder for how long.

    exactly if fuhrer had water down their panzerwagen namely tiger tanks he might have won more battles , instead of building quality that will last forever they should have exchanged quantity for quality.

  • avatar
    PandaBear

    It has a lot to do with the customers’ expectations as well as how much they can afford.

    Currently they get away because customers will buy any car as long as they are cheap. Like the lack of wind tunnel test, the CEO is right about the customers will not really use it like the US and European drivers use their cars. So what you end up with is a lot of 1st generation driver buying 1st generation cars. As the customers expect more and can afford more, the auto companies will put in more attention and do more.

    Yes, it would take at least a decade unless they buy a company like Volvo, Mitsubishi (if the Japanese will reduce its pride and let the Chinese buy it), Saab, or hire all the retired and laid off engineers from US/Europe to clean up the mess.

  • avatar
    CJT

    Was any more of this report ever to be made available? I would like to read it but as a student I’m too scared to even ask how much it would cost to get access to the document.


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