A very strange spy scandal is brewing between (South) Korea and China. Acting on a tip of the (South) Korean National Intelligence Service (the Korean equivalent of  the CIA and FBI rolled into one,)  Korean state prosecutors accused China’s SAIC of stealing sensitive state secrets from Korea.

Then, they indicted seven senior Korean engineers at Korea’s Ssangyong on charges of leaking technology essential to develop hybrid cars.
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“China is a global driver of growth in the automotive market,” said Friedrich Eichiner, CFO of the BMW Group. “China will play a major role in the global automotive business, in the development of future technologies.” Then he signed off on a major expansion project. Together with joint venture partner Brilliance, BMW will be able to produce 175,000 Made in China BMWs, up from 30,000 units currently.
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China may be the world’s largest auto market until further notice. Its much feared auto exports however are nothing to write home about. In fact, China’s already measly car exports have declined for 14 consecutive months since August 2008. For the first half of this year, China exported only 191,000 units. This in a market that is expected to be good for 12m units domestically. Other countries, such as Germany and Japan, typically export the same number of cars they consume at home. A good deal of the few vehicles that are exported from China are commercial and utility vehicles, sold to underdeveloped markets.

Two months ago, Zhao Hang, President of the China Automotive Technology and Research Center, blamed quality and after-sale service problems for the underwhelming performance. He also said that Chinese auto exporters lack knowledge of overseas demand, government policies, regulations and certification.

The Chinese government can’t stand it any longer.
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The Chinese government had announced earlier this year that it wants to “encourage” its more than 100 automakers (nobody is quite sure how many there really are) to consolidate. The goal: Make China’s industry more competitive with foreign rivals. Beijing wants to see four big ones and four smaller ones. Unsaid: the remaining 90-odd carmakers should look for other employment.

To lead by example, the Chinese government just initiated one of the largest merger deals in the Chinese auto industry. Easy for them to do: The government owns both companies.
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At the upcoming 2009 Guangzhou auto show, Volkswagen China is expected to announce that they will build a plant in southern China, Gasgoo writes, citing reports in sohu.com. Not much else is revealed, not even which of their two Chinese joint venture partners will get the new plant.

Volkswagen cooperates with two companies in China: FAW, based in Changchun in the North, and SAIC, based in Shanghai in East China. Both are bitter rivals.
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Intellectual property warriors, get your guns: Following GM, its arch nemesis Toyota will plant a brand new R & D center smack into the alleged intellectual property jungle called China. Toyota plans to spend between $330 and $440 million for the center. Building will commence next year. Compared to Toyota, the one GM built in 2008 was the lite version at a price of only $250 million.

The Toyota R&D center, complete with a full-scale test course, will be located not far from the GM center, in the outskirts of Shanghai, Gasgoo reports.
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The Chinese city of Shanghai is thinking of rewarding buyers of an eco-friendly alternative-energy car with a free license plate, Shanghai Daily reports via Gasgoo. Big deal, you say? In Shanghai, it is a big deal.
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So used has the MSM become to China’s red hot car growth, that Reuters headlines the October sales report “Chinese car sales dip in October, but still robust.” China’s passenger vehicle sales clocked-in a year-on-year growth of 79.6 percent in October. In September, the growth was 83.62 percent, which serves as the reason for Reuter’s slight concern.
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