China Cranks Up Its Car Export Machine. Thank You, America. Merci, France

Quite ironically, foreign carmakers, namely GM and now French PSA, help China kick-start its ailing export machine.

Everybody had been hysterical about cheap Chinese cars that would soon flood the market, but it didn’t happen. Quite the opposite is happening: Joint venture brands, led by General Motors, are grabbing a larger and larger share of the Chinese market. And foreigners are gearing up to get China a chunk of the world market.

Car exports from China still suck. According to data released by the CAAM, China exported only 625,200 vehicles from January through September, and of those, only 346,700 were passenger vehicles. In the same time, China imported 728,700 cars, and most of them of the higher priced variety. This irritates the Chinese government to no end, but there is not much they can or want to do. At the Chengdu confab, officials officially admitted that the domestic Chinese car industry is not ready yet for the global market.

We have been saying it for a while: The only way to increase exports from China is to export joint venture cars made in China.

The company that had been leading this push oddly is General Motors, the company which still has shareholders in Washington and at the UAW for which Chinese exports are a – well – red flag. Early this year , GM started to export its made-in-China Sail. Only to South America, but soon also to Africa, Middle East and Eastern Europe. When we wrote about this, we said this would start a trend amongst of their joint ventures, and it sure did.

Reuters reports that joint venture with France’s PSA and China’s Changan has big export plans. According to the report, the JV “plans to sell premium cars in China, the world’s biggest auto market, and in some overseas markets.” Not cheap cars. Premium cars.

The JV will set up a research and development center to develop its own brand, as well as the Peugeot and Changan brands. And it plans to export all.

“It is the first joint venture to be allowed to set up an overseas production base and operate the export of multiple brands,” the company said in a statement.

The JV will most likely start with the Citroen DS line, debuted at the 2011 Shanghai auto show.

Swallowing the national pride and using foreigners as export vehicles makes sense for China. The same strategy contributed a lot to the Indian industry which turns into an export powerhouse, as we speak.

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  • Nuvista Nuvista on Nov 20, 2011
    We have been saying it for a while: The only way to increase exports from China is to export joint venture cars made in China. Not the only way, but a prudent first step to ensure that the cars are up to international safety and quality standards by leveraging the expertise of foreign automakers. The Chinese companies will eventually get their act together like the Japanese and Korean automakers. The other drivers are that the foreign companies want to take advantage of lower manufacturing costs in China and reduce currency exchange risks.

  • Jeffzekas Jeffzekas on Nov 21, 2011

    First the Chinese will do joint deals... then, once they have mastered our technology, they will nationalize foreign assets, sell below cost, and then, after wiping out competitors, control the industry. China will have industrial jobs, and the US will have nothing but minimum wage service industry work. Winning!

  • DenverMike When was it ever a mystery? The Fairmont maybe, but only the 4-door "Futura" trim, that was distinctively upscale. The Citation and Volare didn't have competing trims, nor was there a base stripper Maxima at the time, if ever, crank windows, vinyl seats, 2-doors, etc. So it wasn't a "massacre", not even in spirit, just different market segments. It could be that the Maxima was intended to compete with those, but everything coming from Japan at the time had to take it up a notch, if not two.Thanks to the Japanese "voluntary" trade restriction, everything had extra options, if not hard loaded. The restriction limited how many vehicles were shipped, not what they retailed at. So Japanese automakers naturally raised the "price" (or stakes) without raising MSRP. What the dealers charged (gouged) was a different story.Realistically, the Maxima was going up against entry luxury sedans (except Cimarron lol), especially Euro/German, same as the Cressida. It definitely worked in Japanese automaker's favor, not to mention inspiring Lexus, Acura and Infiniti.
  • Ronnie Schreiber Hydrocarbon based fuels have become unreliable? More expensive at the moment but I haven't seen any lines gathering around gas stations lately, have you? I'm old enough to remember actual gasoline shortages in 1973 and 1979 (of course, since then there have been many recoverable oil deposits discovered around the world plus the introduction of fracking). Consumers Power is still supplying me with natural gas. I recently went camping and had no problem buying propane.Texas had grid problems last winter because they replaced fossil fueled power plants with wind and solar, which didn't work in the cold weather. That's the definition of unreliable.I'm an "all of the above" guy when it comes to energy: fossil fuels, hydro, wind (where it makes sense), nuclear (including funding for fusion research), and possibly solar.Environmental activists, it seems to me, have no interest in energy diversity. Based on what's happened in Sri Lanka and the push against agriculture in Europe and Canada, I think it's safe to say that some folks want most of us to live like medieval peasants to save the planet for their own private jets.
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  • MaintenanceCosts There's no mystery anymore about how the Japanese took over the prestige spot in the US mass market (especially on the west coast) when you realize that this thing was up against the likes of the Fairmont, Citation, and Volaré. A massacre.