By on November 6, 2006

930abeijing_traffic222.jpgThe Chinese automotive market has over a billion potential customers. Sales growth is well into the double digits. Labor rates are a fraction of those paid in western countries, without any union rules to slow down investment or add legacy costs. An ideal place for American investment? Depends on how you look at it. The Chinese market is controlled by a totalitarian government and regulated by an Automobile Industry Policy that’s more convoluted than a bowl of shahe fen noodles. As China nips at Germany’s heels to become the world’s third-largest auto producing country, let’s take a closer look at the sleeping dragon.

There are nearly 100 automobile manufacturers in China.  Ninety-percent of the market belongs to eight state-owned companies. To meet soaring demand for new cars, these companies have partnered with automakers from around the world. These partnerships can appear strange; one Chinese company may have several partners which are competitors in the rest of the world. Here’s the list:

FAW:  Toyota/VW/Mazda
SAIC:   GM/VW
Changan:  Ford/Suzuki
Dongfeng:  PSA Peugot Citroën/Honda/Nissan-Renault/Kia
Guangzhou AIC:  Toyota/Honda
Beijing AIC:  DCX/Hyundai
Nanjing AIC:  Fiat
Brilliance:  BMW

While Chinese law prohibits any foreign company (or combination of companies) from owning more than 50% of their Chinese partner, these joint ventures have proven lucrative for all the parties involved. The Chinese companies get access to the engineering and design expertise of world-class companies, while the partners gain a quick inroad to what is arguably the hottest new car market in the world. 

As the market has grown, a number of independent (i.e. carmakers who aren’t affiliated with a foreign manufacturer) local companies have sprung up. They are usually either motorcycle manufacturers expanding into the auto market, new companies funded by capital from other industries (such as consumer electronics) or parts manufacturers that started assembling their parts into complete cars. The primary independent players are:

Southeast
Chery  
Geely
GreatWall
Zhongxin
Jianghuai
Hafei

Of these, government–owned Chery is the best known– thanks to Malcolm Bricklin’s professed intention to import cars built by Chery under his Visionary Vehicles nameplate. While Bricklin keeps pushing back the introduction of his Chinese-built products due to quality, production and safety issues (not to mention a lack of investors), he insists he will revolutionize the American market with his line of low-cost, high value vehicles. Recently, DCX has also been negotiating with Chery to produce a subcompact economy car for Chrysler.

Chery’s other claim to fame isn’t so, well, cheery. They jump-started their production capability by buying the defunct VW factory in Westmoreland, PA and relocating it to China lock, stock, and tool dies. They then procured blueprints from SEAT for a car based on the Jetta and began producing a clone. (Jetta is the biggest selling car in China and the Chinese market generates almost 20% of VW’s pre-tax profits). As you can imagine, VW was furious. They eventually accepted a financial settlement in compensation. 

To expand their operation further, Chery began hiring engineers from other companies including Daewoo. Two new models, the “Son of the Orient” and the “QQ” were suspiciously similar to Daewoo’s Magnus and Matiz (sold as the Chevrolet Spark). Chery introduced the QQ six months prior to the planned introduction of the Spark, priced $1500 lower than its automotive homonym. 

GM accused Chery of “copying and unauthorized use of GM-Daewoo’s trade secrets.” Chery countered by claiming they had developed the QQ independently and with only “inspiration” from the Matiz. Since this “inspiration” consisted of styling so similar you couldn’t tell them apart from more than 10 feet away and interchangeable body panels, doors and other parts, GM filed suit.

After three years of litigation, GM and Chery finally settled out of court. While the details of the settlement haven’t been released, GM did win one concession: Chery can’t sell cars in the US under its own name due to the similarity between “Chery” and “Chevy.”

The problems with Chery underscore the sword of Damocles hanging over foreign manufacturers operating in the Chinese market. Any time you’re dealing with companies owned by a dictatorial government, you’re at the mercy of the whims of the political leadership. The Chinese government (controlled by the army) provides all of the information used for business planning: economic growth, per capita income, projected sales, etc. They create the rules for the protection of intellectual property. They control the courts that interpret the rules on the protection of intellectual property. They control everything within the supply chain, from labor to raw materials to retail distribution to taxes to traffic laws. 

Like China’s so-called citizens, foreign auto companies are completely at the Chinese government’s mercy. If China’s rulers decide to nationalize all automotive production facilities, there’s nothing foreign automakers can do but leave. Meanwhile, they’re making hay while the sun shines, doing whatever they can to make sure their “partners” don’t pull the plug.

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59 Comments on “The Chinese Automotive Market: A Primer...”


  • avatar

    Thanks Mr. Williams for the primer. The only major fault I can find is that this editorial comes about one or two years late as the Chinese car market has been rip-roaring for awhile now. =)

    Also, the last few lines are unnecessarily ominous. The Chinese government, while heavy-handed and not always wise, is rational enough to realize the benefits of foreign partnerships and investments.

    They won’t nationalize automotive or other production facilities…they’re smart enough to know that will lead to economic regression, if not devastation in China. And that doesn’t help anyone; the Chinese people, the Chinese government, and foreign business would all suffer.

  • avatar

    China’s non-democratic rulers will do whatever is necessary to maintain their power. Period.

  • avatar

    “The Chinese government (controlled by the army) provides all of the information used for business planning…”

    I didn’t know the Chinese government was controlled by the army.

  • avatar

    I agree that China’s non-democratic rulers will do whatever is necessary to maintain their power.

    At the moment, this entails keeping a tight grip on the press and naysayers, but letting the economy and letting foreign investment flourish.

    Doing anything less – like re-nationalizing factories and corporations – would be a move that would literally make the natives restless. A peasant revolt is not what the Chinese government needs right now. Hence – no need to worry about the security of VW’s, Toyota’s, Honda’s and GM’s investments in China.

  • avatar
    Dr. JP

    ThriftyTechie,
    I’d like to disagree. If the Chinese government felt threatened somehow by the auto industry, they would nationalize it (but I admit I don’t know what this scenario would look like). The overriding goal of the Chinese government is survival, and anything that gets in that way will be run over.

    There is also an inherent conflict between capitalism and totalitarianism/central planning. If capitalism becomes more of a threat to the government, it will be dealt with.

    The government could also nationalize certain companies to punish their partners, such as FAW, SAIC and Changan to punish the US companies for our support of an independent Taiwan.

    Just my two cents.

  • avatar
    ash78

    One thing I find particularly interesting about China is that Buick is doing incredibly well there. Apparently they have several-month waiting lists for most models…and get this: They are synonymous with Gen-X middle class success. Yep, the way to show your fellow Chinese that you, your wife, and your 1.0 (male?) child have “made it” is to drive a Lacrosse. Funny how much difference it can make when you introduce a brand to an entirely new market, free of decades of brand stigma.

  • avatar
    Glenn A.

    Don’t forget BYD auto, which just announced a retractible top car which – at least from the front – looks “rather like” the a Mercedes SL in the front. The BYD F3 looks “rather like” a Toyota Corolla from all angles except the rear, where it resembles a last-generation Honda Civic. I wonder if the doors from a Corolla would bolt onto an F3? The wheelbase and other major dimensions are identical… the F3 uses a Mitsubishi 1.6 litre engine (licensed design).

    BYD have a self-designed F6, looks about the size of a Kia Sedona, has a Mitsubishi 2.35 litre engine (licensed design).

    They’re moving towards self-designed cars, for sure. Looking into hybrids and electric cars, too. (BYD is one of the largest cell phone battery companies in China and bought up a small car company to break-into the market).

    Here is today’s news info about the F8 retractible

    http://www.globalautoindex.com/news.plt?no=1600&nl=y

    Here is the BYD automobile web site in China, which may be read in English (is that telling, or what?)

    http://www.bydauto.com.cn/

    I think BYD are in the top 15 or top 20 Chinese auto manufacturers, not among the smallest by any means.

    The Chinese are learning very, very fast.

  • avatar
    turbosaab

    The first thing I looked at was the picture, to see if I could recognize any cars. The silver one in the middle lane (third from rear) looked like a ’99-05 Jetta to me… after reading the article, I wonder if it was a Chery.

  • avatar

    Byd is one of the independents that branched out from consumer electronics (specifically, they’re the second largest producer of rechargable batteries in the world). They got into the auto business by purchasing the Tsinchuan Automobile Company in 2003. Since then they’ve produced several cars which are usually described by mentioning their very close simliarity with some other car.

    The Byd logo is interesting too. If you take BMW’s logo and elongate it slighty to give it an oval shape, retain the black outer border, and divide the center horizontally into 2 parts insteady of four (retaining the same blue and white colors) you have it.

    That’s only one of several Chinese auto logos which look very much like someone else’s. Chery’s is very similar to Infiniti’s and Chang’an’s looks like in inverted Toyota emblem.

  • avatar

    Very informative article! I was wondering if another article talking about Chinese safety and emission standards could follow? Also, what is the state of independant design in China? Could you point out good looking vehicles that aren’t copies? Are there Mechanical / Automotive engineering / Industrial Design schools preparing people to step forward and design independant vehicles?

  • avatar
    carlisimo

    Question about the article… are you saying that the independent companies only have 10% of the market? I thought it’d be more, since we always hear so much about them.

    Thanks for the primer though; I hope to see more.

  • avatar
    wsn

    I seriously doubt how many of you have ever been to China. My 2 cents:

    1) The learder will do whatever they can to remain in power, not unlike of western learders. Look how many years Tony Blair has been in office—longer than Jiang, the previous leader of China.

    2) Don’t over emphasis the government’s control. Mao was like Caesar. He established the regime and thus had the ultimate power. But such people only exist once every century. Mao’s successors are just ordinary people. They may be greedy, shortsighted and emotional. But they don’t have the ability to change the course of capitalism.

    3) Unlike 30 years ago, the ruling party’s power are not concetrated at the very top. Vast number of CCP members and mid-level officials are more interested in buying a new Buick LaCrosse than pursuing communisim.

    4) I predict that China will be more and more like South American countries: corrupted, with occasional politial coup, but ultimately a heaven for large multinational companies.

  • avatar

    The latest information I could find was dated last year (2005) and at that time the joint ventures had 90% of the market. You tend to hear more about the independents because they manufacture and market under their own names. The bulk of the cars produced by the joint ventures are manufactured and sold under the names of the JV partners, not the Chinese partners.

  • avatar
    wsn

    The joint ventures cannot be viewed as 100% percent of state-owned, since they are also owned by the foreign auto companies (usually 49%). That has a lot to do with their operation.

  • avatar

    The joint ventures aren’t 100% state-owned. The Chinese partners that control the majority share of the joint ventures are, though.

  • avatar
    wsn

    BTW, I don’t think it’s wise to think a country is either “dictatorship” or “democracy.” Most of the times, a country is a mix of both.

    IMO, on the democracy scale, let’s say China should get C and North Korea should get D. Germany probably can get A, while the U.S. gets B+ (for spying on its own citizens).

    And then investments into these countries are like investing in bonds. If there’s not the high yield, you won’t buy it. Otherwise, if there’s good enough yield to justify the risk, people still buy it.

  • avatar

    Why don’t these companies copy a vehicle actually worth copying? I’d gladly put down 20k on a Ford or Carrera GT clone. Actually forget modern cars, go press a Ferrari 250 GTO and I’ll be there.

    ;)

  • avatar
    starlightmica

    Obligatory Daewoo Matiz vs. Chery QQ offset crash test pics link:

    http://paultan.org/archives/2006/02/18/chery-qq-crash-test/

    Ouch. Guess some things were not copied, and not for the better.

  • avatar
    carlisimo

    As for the politics of China, I’d say we’re using words carelessly.

    China is not a democracy. It’s under one-party rule. That one party doesn’t do anything that could be called “communist” by the original meaning of the term.

    They run businesses under capitalist ways, ie providing capital to begin an enterprise, and controlling/keeping the bulk of the revenues. (Under the original meaning of socialism, it would be the workers that hold control of the end product and profits of their work; under the original meaning of capitalism, it’s the provider of capital who does.)

    The difference between our capitalism and theirs is that theirs is not a free market (not a synonym with capitalism). In a free market, anybody can act as a provider of capital or a recepient of capital to start a business. In China, the ruling party also controls the economy by choosing who gets funded and who gets the profits. Most dictatorships end up working that way, as non-free capitalist markets… if you have friends in high places, you can play.

  • avatar
    Sajeev Mehta

    Very informative article, Frank. It confirms my thoughts that India becoming an automotive powerhouse, or at least one of the largest markets around. My homeland is far from perfect (if you’ve been there, you know) but the middle class is growing and there’s a Democratic (for the most part) government in place. That, and the people aren’t forced to exclusively drive rebadged Morris Oxfords anymore.

    The stability of the government is crucial, and any automaker going into China has to worry about losing everything if the government looks at them the wrong way.

  • avatar
    noley

    China seems to have no compuction at all about copying or stealing another firm’s intellectual property, be that software, music and video, wristwatches or automobiles. And as long as they can primarily sell the fake products to their billion-person home market they can mostly get away with it. With automotive “partners” it becomes a bit harder, but the PRC will always push the limits of every agreement they make. I think they look at having to settle with a company whose ideas they have “borrowed” as just a cost of doing business.

    At some point–one would think–their partners (and the rest of the world) will let them know how to play well with others in global trade, but I think it will take some years. Even so, there’s always a market for cheap stuff. Unless a product is egregiously bad, there are a lot of people will always buy based on price even though they’ll have to replace it sooner than if it were of good quality. China has trained us well with all kinds of consumer electronics and other stuff.

    The question is whether that will carry over to cars. Probably not in five years, but I bet it will be less than 10. Partners will likely be part of the mix, but it will happen.

  • avatar
    Jan Andersson

    I’m SO happy that BMW isn’t partnering Dongfeng.

    Also, I belive that people prefer to buy brands that they can pronounce. The popularity of Hyundai in Sweden speaks against that, but I have found that the owners just call their cars “Hondai” which seems familiar enough.

    Perhaps “Buick” is easy to pronounce in Chinese?

  • avatar
    Luther

    The Chinese gov’t has figured out that global political power requires wealth creation and that killing off productive people guaranties third-world laughing-stock status. Like North Korea.

    The Gov’t wont do anything to kill off capitalism/in-flowing investment capital for fear of another Tiananamen-style uprising that will make the original look like a ladies tea party. The Gov’ts survival depends on capitalism now. Cant put that gennie back in the bottle.

  • avatar
    Luther

    Perhaps “Buick” is easy to pronounce in Chinese?

    Or perhaps Buick translates to Oral Sex in Chinese.

  • avatar
    jerseydevil

    Do anything to stay in power? Boy, that sounds familiar. Sniff around Washington, DC lately? It’s why I no longer watch TV, the political ads are so shrill. Well that and ALL the car shows suck.

  • avatar

    “Perhaps “Buick” is easy to pronounce in Chinese?
    Or perhaps Buick translates to Oral Sex in Chinese. ”

    No..but LaCrosse is so bad in French that in Canada it’s called the Allure.

    How many of the people offering opinions above have actually been to mainland China? I’d bet very few. Some of the discussion about the government sounds worse than a highschool politics class. No offence guys I think TTAC readers and writers are great but sheesh please lay off the politics. Nationalizing the auto industry? What decade is this?

    Let’s reopen the discussion once GM et co figure out how to convince consumers to buy their own brands built in China in the NA market.

  • avatar

    Sajeev:

    Mahindra plans SUV, pickup in ’08

    Lindsay Chappell | |

    Automotive News | 1:00 am, November 6, 2006

    Mahindra & Mahindra Ltd., a small automaker in Mumbai, India, is quietly preparing to enter the United States. Mahindra has signed an independent distributor, Global Vehicles U.S.A. Inc., of Alpharetta, Ga.

    Global Vehicles is asking dealers for a $125,000 payment to apply for a franchise.

    Dealers who have heard Global Vehicles’ sales pitch say Mahindra plans to reach the market in October 2008. The venture plans two vehicles, they say: a regular-cab pickup with a 2.6-liter turbodiesel engine and an SUV called the Scorpio. The company already sells farm equipment in the United States.

    Mahindra officials did not respond to phone and e-mail requests from Automotive News for information about the arrangement. The company is best known for supplying India’s military with small Jeep-like vehicles.

    William Goetze, a former Mazda executive, is president of Global Vehicles. He said an agreement with Mahindra management restricts him from speaking about the venture publicly at this point.

    Global Vehicles has given dealers a single-page copy of a “distribution agreement” that is signed by senior executives from Mahindra and Global Vehicles, but it does not state what the agreement covers.

    Goetze retired as general manager of Mazda’s U.S. sales operations in 1997. He would not say how many dealers have signed up for the franchise.

  • avatar

    Kurt, I’ve never been to China but I just finished 21 years in the military where I sat through briefings on foreign politics on topics you’ll never see on CNN or Fox News. I also worked 2 years with a guy whose parents fled China in the 60s and still has relatives living there. We talked quite often about the government there, and he told me a lot that he had learned from his family the times he had visited them.

    And yes, if the government saw fit and thought it would benefit them, they wouldn’t hesitate to take over any industry there. The “PR” China presented on TV and through the tourist industry is a lot different from everyday life there, particularly in the areas outside the large cities.

  • avatar
    wsn

    How many of the people offering opinions above have actually been to mainland China? I’d bet very few. Some of the discussion about the government sounds worse than a highschool politics class.

    Totally agree. I would suggest people to keep their silence if they haven’t been to China in the past five years. It’s like … how can you comment on the Ford brand without knowing it’s car models for the past five years? Of course, you all have your freedom of speech. But speech with substance will be more appropriate on a forum with “truth” in its name.

  • avatar
    David Yip

    Good to see some animated criticism of the article, but the article itself was pretty informative also.

    In my view, the Prime Directive in the Chinese government, beyond self-preservation (Which, let’s face it, is the the goal of any government) is the stability of China itself.

    While the government is totalitarian, it isn’t stupid. Nationalizing an industry would undoubtedly cause all sorts of unrest, which is precisely what the government does not want. Rest assured the embrace of commerce should keep the wheels turning smoothly.

    That said, the rule of law isn’t as strong is it should be. Doing business in China requires lots of connections, tact and finesse, and as others have mentioned, falling out of favour can be a pretty big deal.

  • avatar
    wsn

    Frank:

    The United States and PR China are rivals. It’s easy to understand the US military won’t say anything good about China. Do you expect the GM management to say anything good about Toyota?

    I am not saying China is good or something. But you need the first hand experience to know what it is really about. It’s like every auto writer is bashing Ford. But you just don’t know the “truth” about Ford by reading the articles. You got to drive one for yourself. A review article without a test drive is pointless.

  • avatar

    wsn:

    By “PR” China, I meant the “Public Relations China” – the face they present to the rest of the world – not “People’s Republic of China”. Sorry I didn’t clarify that.

    So from your comments I can assume you’ve lived and experienced daily life there?

  • avatar
    carlisimo

    I speak Chinese (albeit not well, but my mom’s a native speaker) and no, Buick is not a word you could really pronounce in Mandarin. Case in point, Roewe really is the closest you can get to saying Rover. Volvo is Fu-hau (which works out great because it sounds a lot like “wealth” and I have no doubt that’s helped the brand, at least in Taiwan where I’ve spent time).

    I believe Buick is pronounced “bie-keh” (the vowel in the second syllable is one of those upside-down e “shcwa” phonetic things). There’s no ui dipthong in Chinese, so it “boo-ee-keh” would’ve been the only way to get closer to the real sounds… but names in Chinese tend to have two characters (each of which is one syllable).

    But Buick is a popular brand because it’s American, it’s known for big cars (bigger is better there), and it was one of the first foreign brands in China (probably back to the pre-Mao days) which means only really powerful people had them.

  • avatar
    Luther

    Bie-keh, Bie-jeh. I was close.

    If people stopped buying the F-series and Explorer/Expy, Ford would be chapter 7 by the end of the year.

  • avatar
    rtz

    “jump-started their production capability by buying the defunct VW factory in Westmoreland, PA and relocating it to China lock, stock, and tool dies.”

    That’s funny. Hey China, there is an ex GM SUV plant in Oklahoma City for sale…

    “interchangeable body panels, doors and other parts”

    Too funny. R&D? Research and Duplicate.

  • avatar
    wsn

    So from your comments I can assume you’ve lived and experienced daily life there?

    I grew up there and I am a native speaker of Chinese. My family came to Canada years ago, since we didn’t like the regime and my dad was accomplished (in math) enough to find a job here. Nevertheless, we visited back mutliple times over the years.

    I never doubt that the government would shoot at people if challenged. But don’t forget that the auto sector actually opened up after the 1989 TianAnMen incident.

    The communist leaders are now most interested in:
    1) luxurious houses and cars
    2) women
    3) possibly Harvard eduction for their children

    They are not interested in:
    communism

    Things do evolve. Right now the most dangerous part of Chinese politics is that giant gap between the rich and the poor. News headlines are like “BMW X5 (delibratly) hit a poor woman” or “Tomson (developer) introduces 4 luxury condo towers, starting at 40M yen (5M USD) per suite.” The party, this time, is there to protect the capitalists from the rage of the poor workers, with their army.

  • avatar
    Terry Parkhurst

    If indeed foreign auto makers who partner up with existing Chinese auto makers are to become dependent on the “mercy of the government” in China, then they are truly indulging in wishful thinking. The week before last, a group of Tibetans tried to get across a mountain pass into Nepal (believe that was where they were headed). A smaller group of American climbers caught Chinese soldiers as they killed many in that party. “They shot them like dogs,” said one of the Americans.
    The Chinese government has absolutely no mercy. And American businesses should not do business there for the simple reason that it is wrong. President Bush likes to say how the embargo against Cuba should continue until the Cuban people gain freedom. That should also apply to China. Of course, the Cuban people will never buy or build cars, in the numbers that the Chinese people are expected to.
    I know, I know, this is an automotive web site, not a political one. However, when you deal with China, politics will always be involved. That’s how communism works, eh?

  • avatar
    BerettaGTZ

    I’m currently living and working in China (yes, we CAN get this site as it is not censored despite lots of previous replies bad-mouthing the gov’t, Communist Party, etc.)

    Despite what some of you like to think, the government doesn’t have an iron-fisted grip on business and Chinese society. Captalism rules. Consider: the government for many years tried to keep Toyota out of China because of its intense dislike of Japan, but Toyota kept coming and purely on the strength of its products is now experiencing triple-digit growth.

    The government’s greatest fear is social instability. It has enough bad memories of the days of Mao and his many revolutions to know that it is far better to preserve the status quo and make periodic adjustments than to introduce sweeping changes at a time of already radical change in China.

    If the government tried to do something so drastic as to nationalize the auto industry, you can be sure that most foreign investment in China would come to a grinding halt. The resulting social unrest from loss of jobs and economic recession would be government’s worst nightmare come true.

  • avatar

    I’m with Mr. Yip and wsn.

    Owning 51% of a strong bull is better than owning 100% of a crippled calf.
    The Chinese partners in the auto industry understand this.

    “…if the (Chinese) government saw fit and thought it would benefit them, they wouldn’t hesitate to take over any industry there.”
    True. But I can’t see any scenario where that would be the case. Even if the foreign partners were somehow a pain in the ass, it couldn’t possibly match the searing burning sensation that the Chinese government would feel in the posterior if they annexed foreign investments.

    Let’s just put it this way: the U.S., Japan, and Germany wouldn’t stand around and shrug their shoulders if some gross misappropriation of assets occurred.

  • avatar
    Jan Andersson

    “Doing business in China requires lots of connections, tact and finesse, and as others have mentioned, falling out of favour can be a pretty big deal. ”

    From 1731 to 1813, the Swedish East India Company made 132 return trips to Canton, China. They brought back to Europe luxury goods as (50 million pieces of) china, tea and silk. There were Flemish, British, Dutch, Danish and French East India Companies as well. From the old stories, nothing have changed, except that we’re not importing luxury goods anymore.

  • avatar

    From today’s Detroit Free Press:

    SHANGHAI, China — General Motors Corp. intends to keep investing in China’s fast-growing market, looking to offer technologically advanced vehicles and to buy more parts, Chairman Rick Wagoner said Monday.

    “We are willing to invest ahead of demand here because we are very bullish that demand is going to keep growing here,” Wagoner told journalists after taking a ceremonial spin, with Shanghai Mayor Han Zheng, in GM’s hydrogen fuel cell-powered Sequel.

    GM’s sales jumped 36.7% in the first three quarters of this year, helped by strong demand for newly launched models, such as the Buick LaCrosse.

    I can’t help but wonder if GM is on the verge of abandoning the US auto market for greener pastures. (Yeah, I know this isn’t a GM Death Watch, but this all seems to fit together like a big jigsaw puzzle.)

  • avatar
    BuzzDog

    Glenn A, thanks for the link to the BYD site. Interestingly, the BYD logo looks suspiciously like…BMW’s.

    On another note, how is “Chery” pronounced? “Cherry” (like the fruit) or “cheery” (like the mood)?

  • avatar

    Buzzdog,

    From the Chinese Marketing and Communications web site in UK:

    They named their company Qirui, which has connotations of good fortune. It’s pronounced a little like “cheery,” but the official English name was spelled without the second “e,” to indicate that Chery would always be one step removed from the complacency that comes from happiness.

  • avatar
    noley

    I’ve not been to China, but colleagues who have have told me some about how China is operating. I do a lot of work in the printing industry, where China has long been a player. Lots of books of all types are printed in China and shipped around the world. The publishing industry is in the verge of huge change and China is playing to get a big slice of the pie. What they are doing in printing now is much like what they are doing in other industries.

    Printing is basically a manufacturing operation and varying levels of computer technology is involved, so skilled labor is required. Chinese firms, with the support of thhe government, will select where a printing facility will go. They take the land, build a printing plant, then take the people who were living there and train them to be press operators, prepress workers, how to bind books, run computers, do design, etc, etc. They also build houses and schools for these same people. They do much the same for all types of manufacturing.

    Cars are obviously a lot more complex than many other manufactured products, but Chinese people are as smart as any other and can be trained to do the work. Like I said in an earlier post, give this about a decade and China will be a player in the world auto market. And quality will rise, just as it has in Japan and South Korea. It’s all a matter of time, and China has always taken the long view.

  • avatar
    wsn

    Replying to A smaller group of American climbers caught Chinese soldiers as they killed many in that party. “They shot them like dogs,” said one of the Americans.
    The Chinese government has absolutely no mercy.

    American soldiers shoot Iraqis like dogs (not to mention rape the women). Does that mean the rest of the world should not do business with the United States?

    Replying to They named their company Qirui, which has connotations of good fortune. It’s pronounced a little like “cheery,” but the official English name was spelled without the second “e,” to indicate that Chery would always be one step removed from the complacency that comes from happiness.

    Don’t attempt to pronounce “Qi Rui.” The vowels and consonants of Chinese don’t correspond 100% to those of English. You won’t get it, without seriously learning the Chinese language (which takes you more than 10 years if you are past 30). Just make your life easy and use “Cherry.”

  • avatar
    David Yip

    However, when you deal with China, politics will always be involved. That’s how communism works, eh?

    Again, politics is involved with big business anywhere, and certainly not exclusive to “Communism”. State and provincial governments will change laws and waive taxes to place auto plants, and industry lobbies will always try to exert influence on governments to legislate favourable policies.

  • avatar
    Lumbergh21

    Buzzdog,

    “From the Chinese Marketing and Communications web site in UK:

    They named their company Qirui, which has connotations of good fortune. It’s pronounced a little like “cheery,” but the official English name was spelled without the second “e,” to indicate that Chery would always be one step removed from the complacency that comes from happiness.”

    Yeah, right. It’s just pure coincidence that it is very similar to an established and possibly iconic US auto manufacturer’s name: Chevy. It sounds like they either enjoy thumbing their noses at GM or they think Americans are exceptionally stupid (or perhaps both).

    I hate to get into the poilitics of the situation as anything said here will not make one wit of difference in the readers views. To know how things operate in China just look at Noley’s post. The government, I mean the “People”, own all means of production right down to the citizen’s lives. I think that it is obvious that this type of government views these joint ventures as 100% theirs, whatever the level of foriegn investment. They have no problem with violating intenational copyright laws, stealing car designs, why wouldn’t they steal the means of production as well? Somebody equated China to the South American countries as though that made them somehow less totalitarian and less likely to sieze the means of production in these joint ventures with other nations. It seems to me that the seizing of property, including the oil and gas fields developed with foriegn energy companies, has occurred and rather recently in South America.

    No I do not live in China. However, a good friend of mine and his parents have spent many years in the far east including, for his parents, several years recently in China. They most certainly do not describe it as a free, loving, utopia. The way that they described the government’s treatment of the people was right in line with Noley’s description of how the people are treated, like chattle to be trained, sold, bred, and if necessary put down.

  • avatar
    John Williams

    wsn: American soldiers shoot Iraqis like dogs (not to mention rape the women). Does that mean the rest of the world should not do business with the United States?

    It’s usually not a good idea to introduce such corrosive political opinions in a discussion that is largely about automobiles.

    At any rate, the above accusations are patently false and are merely the byproducts of whatever left-leaning media source you pieced them from.

  • avatar
    BuzzDog

    John, I agree that wsn’s comments are totally false and inappropriate in this forum, but I seriously doubt that any responsible “left-leaning media source” (and they DO exist) would resort to comments that are so inflammatory.

  • avatar
    Lumbergh21

    “John, I agree that wsn’s comments are totally false and inappropriate in this forum, but I seriously doubt that any responsible “left-leaning media source” (and they DO exist) would resort to comments that are so inflammatory.”

    I don’t know about that, but some senators and representatives would. :-)

  • avatar
    jerseydevil

    BuzzDog:

    I dont think that wsn’s comments were inapproproate. Alot of this discussion is about politics and governments.

    John Williams:

    There’s alot of americans who feel like that. We are currently having an election. It’s on the minds of alot of us. You dont really need to lean too far left to hold those views.

    About cars (at last):

    I beleive that China will enter the US and European car market. I beleive that all the current manufacturers will help them in return for a piece of the pie. I beleive that quality will improve as they get more experience. I beleive americans will buy cheap cars. We do now.

    This has been in interesting dicsussion about global politics vis-a-vis car manufacturing. I particularly enjoyed the insights of people who live or lived there. Thanks.

  • avatar
    wsn

    At any rate, the above accusations are patently false and are merely the byproducts of whatever left-leaning media source you pieced them from.

    Well, I am a Canadian, living in Canada. Since I do not have 1st hand info from Iraq, I got that American soldier rape news from the “left-leaning” CNN, the very source that also reported the shootings of the fleeing Tibetans.

    P.S. Now we are talking about democracy, here are my two cents:

    1) The United States is a true democracy. The military is under the control of the president, the senate and the congress. And those are elected by American citizens.

    2) Iraq is not a democracy. The American military is the supereme power in Iraq right now. This amry is not controlled by a body elected by the Iraqis, and thus the Iraq citizens can’t do nothing about the sword over their heads.

    Democracy is not about the mercy of a foriegn government, Chinese, American or whatever. Democracy is about counter-balance the power, the force. You must have a say in the ruling military in your country to have freedom and liberty.

    Thus, democracy can be possible in Iraq, only if Iraqis can participate in American elections, OR after an American withdraw and leaving Iraq with their own army (controlled by a government they elected).

  • avatar
    BerettaGTZ

    Would you buy a Haier appliance or a Lenovo computer? These two products are templates for how the Chinese would enter the US market.

    1. A Chinese manufacturer who has developed their quality to Western standards enters the market on their own. (Haier)

    2. A well-funded Chinese company swoops in and picks up the remmnants of a bankrupt GM or Ford, or a spun-off Chrysler. They’ve already done this with MG Rover.

    Those of you secretly wishing for the death of GM or Ford might consider the ramifications of the Chinese government controlling one of America’s largest industrial corporations.

  • avatar
    carlisimo

    (edited out)

  • avatar
    dhathewa

    “Those of you secretly wishing for the death of GM or Ford…” – BerettaGTZ

    Aww, for cryin’ out loud… Most people around this forum just wish that GM or Ford would build a decent, reliable, compact car, preferably with a class-leading warranty. If they did, we’d probably buy it.

  • avatar
    wsn

    American people chose to be a bit more “left-leaning” last night.

  • avatar
    olddavid

    This represents a dilemma in the true sense of the word. Intellectual property rights are non-existent, yet the potential to fund your world-wide redesign with the local profits is very compelling. I personally would feel like a trolling whore outside a flophouse doing “business” with these people, but to finance my family’s well being I guess I could hold my nose. Were I Rick Wagoner, I would send only the most fundamental model and manufacturing plans, and concentrate my efforts in India, which operates a society with [mostly] the same social mores that we have. Deep investment in a totalitarian society with top-down market planning and little rule of law is like hoping the ground will get soft after you’ve jumped off a cliff. The results are predictable.

  • avatar
    trentonl

    CIA World Factbook says the following about China:

    labor force: 791 MM
    unemployment: 9% – 20%
    GDP per capita: $6,800
    below poverty: over 150 MM
    PPP (kinda like per capita income): $5,600

    So, to say “The Chinese automotive market has over a billion potential customers” is stretching it. Most people would be happy with some food… but most can’t even afford that.

  • avatar
    wsn

    trentonl:

    But you don’t need the full billion to be successful, right? GM sold about around 9.2 million cars worldwide last year. That’s less than 1% of the Chinese population.

    Not to mention that the Chinese pupolation grows at more than 10M per year and GDP grows at 10% per year. And yeah, the early players (such as VW and Honda) are already at a huge profit, even if the Chinese government seize all their properties today.

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