By on June 22, 2011

The Chinese quest to own a large Chinese automaker with global reach fell on sympathetic ears with someone who should be scared of the yellow peril: Carlos Ghosn. After all,Ghosn is in charge of two automakers. Nissan is the largest Japanese brand in China. Renault is trying to get traction in China. At the Thomson Reuters Newsmaker event in Tokyo today, Ghosn said he does not only expect one or two large Chinese automakers to emerge on the global market, he also understands why.

First, Ghosn had interesting news for those who think there is no money to be made in China:

“For carmakers, China is one of the most profitable markets in the world. It used to be the United States. Now it is China.”

Ghosn explained that Europe is by and large in the hands of European automakers. The Korean market is nearly 100% in Korean hands. Japan’s auto market is dominated by Japanese. Even “the Americans still hold a substantial market share in the United States.” Then why should the world’s largest auto market be left to the foreigners? Said Ghosn:

“When the government in China says, hey, this is a huge industry, we want to generate a Chinese champion, then that’s logical, it’s normal, we are expecting this. Is this a handicap for us? I don’t think so. It’s a factor. We are facing it everywhere.”

“We are expecting presently that there will be at least one or two global makers coming out of China .How this is going to take place, nobody knows. What is going to be the company, nobody knows. It probably will go through acquisitions of pieces of other companies outside of China, but at the end of the day it is going to happen.”

Ghosn thinks this is a while off.

“I think it is going to be some time before we see a major Chinese makers competing globally. At least five years. Unless there is an acquisition.”

Ghosn mentioned Volvo and Geely en passant, but didn’t see it as a game changer. Saab never came up. Ghosn said it needs a “volume maker.” He stressed “volume maker” several times.

When Paul Ingrassia mentioned Opel, Ghosn sidestepped the issue, and said “I’m not going to give you names.”

Through the power of YouTube, you didn’t have to travel to Tokyo to hear Ghosn uncut. The unedited, full length video on YouTube is required watching if you are interested in where this industry is heading.

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12 Comments on “Ghosn Sees One Or Two Global Chinese Carmakers. Eventually...”

  • avatar

    So far it looks like only SAIC’s MG brand has a future as a high volume car maker, given the fact that they are the only Chinese car maker exporting cars to developed markets… that will change but for now SAIC look like they are leading the pact. I think Geeley is also bound to develop with Volvo on side but beyond that…

    • 0 avatar

      Had the bailouts of GM and Chrysler not been successful, picking up a distressed Detroit automaker at a fire sale price would have been just the ticket for the Chinese. It would have given them access to the North American market, established brands, and an extensive dealer network.

      Using an acquisition to penetrate export markets makes sense. I’m not sure that China will be able to get much traction with a home grown brand anytime soon – “made in China” doesn’t exactly have a positive connotation in the developed world.

      It is interesting that China has stuck to the bottom end of the value chain, basically making other people’s stuff on the cheap. By this stage of the game you would expect them to have developed some global brands. Brands like Toyota and Nikon were getting respect by the late ’60s, more recently brands like Hyundai and Samsung have become household names. Off the top of my head I can’t think of any global Chinese brands.

      • 0 avatar

        Chrysler had a big fire sale a few weeks before they went broke – No one turned up. I guess shabby antiques aren’t that desirable (yet Rover was sold twice).

        Great Wall, Geely, Chery and (soon) FAW are sold in Australia. Not that any have exactly set the market on fire.

        Opel is an American company you know.

      • 0 avatar
        Vance Torino

        Haier comes closest, maybe. Air conditioners and small appliances.

  • avatar
    Mr. K

    FWIW China is a huge market for Porsche, BMW, Mercedes, and the rest of the fine automobiles of the ‘developed’ world. I think that the Chinese cars will get real good real fast, if only to reduce the delta between what they buy from elsewhere and what they make at home. I believe for example the La Crosse is about the same there and here.

    Where do you think Iphones and HDTV’s are made?

    • 0 avatar

      There is no doubt that some good quality products can be made in China – but iPhones are still “Designed by Apple in California”. And they are most likely built in mainland China by a Taiwanese company…

  • avatar

    I don’t. Keep underestimating the Chinese, you Frenchies.

  • avatar

    I also see zero global French carmakers in the future. Oh, wait. We can do that in the present.

    • 0 avatar
      Vance Torino

      An interesting statement considering this is an article about the CEO of Renault-Nissan. Renault being the controlling partner (Renault holds a 43.4% stake in Nissan, while Nissan holds 15% of Renault…)

      PSA Peugeot-Citroen is another matter!
      But Ford and BMW depends on their diesel technology…

      So… I continue to see two global French carmakers in the future. Although a Renault-Nissan like tie-up for PSA with say, BMW, makes a lot of sense.

  • avatar
    Athos Nobile

    Absolutamente sin desperdicio.

  • avatar
    Vance Torino

    As I see it, Opel is the real wild card here.

    GM is obviously and correctly ambivalent about it – its main problem being those nasty “legacy costs” associated with a very expensive European workforce.
    Unlike American GM’s bankruptcy, they don’t seem to have offloaded those costs.
    So GM is weighing whether a Chevrolet-based push with American and Korean engineering can make up for the loss of Opel’s engineering.

    The moral of the story is that whoever ends up with Opel better have REALLY DEEP pockets… like a state-backed Chinese company. So… BAIC it is!

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