China wants more self developed vehicles on the road
Are we going to start to see a squeeze on JV vehicles in the future:
SHANGHAI, Dec 16 (Reuters) – China wants half of passenger cars, including sport utility vehicles, sold to be self-developed by 2015, state media said on Wednesday, up from 44 percent now, as part of a push to build up its own auto industry.
Chinese automaker’s own-brand sedans should account for a 40 percent share of the market, according to revised guidelines for the auto industry, the Shanghai Securities News said, citing unamed sources.
Sales of SAIC Motor Corp’s Roewe and other indigenous sedans came to 1.95 million units in the first 11 months, accounting for 29 percent of overall sedan sales, official data showed.
The guidelines, expected to be released in the first half of 2010, also called for Chinese companies to hold at least 50 percent of any newly-formed foreign venture producing green cars, batteries and key components, the newspaper said.
They also encouraged local automakers to recruit overseas talent, it said, without elaborating.
China’s auto market has been a major bright spot this year amid a steep global industry downturn thanks to Beijing’s policy initiatives which effectively bolstered consumer confidence.
Still, most Chinese automakers are either making foreign brand cars in tie-ups with firms such as General Motors, and Volkswagen AG, or focusing on the lower-end of the market.
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That guideline is impossible to achieve, since Chinese consumers prefer foreign brand cars to domestic brand cars.
If the government in China sets a benchmark it rarely fails to meet it…
By how? Forcing communist party members to ride only Chinese domestic brand cars?
Capping the output foreign brand cars on the market so that Chinese consumers have no choice but to buy Chinese brand cars?
Special housing for people who own only Chinese brand cars?
Exactly how is this supposed to work, when the competition is only intensifying and foreigners are charging in?
If the Chinese government says something is gonna be done its gonna be done… Besides how hard can 6% in 5 years be ?
What’s been listed here is nothing for China. China is not like Korea. Korea is so weak, China so much stronger.
That is a pretty bold statement. Someone correct me if I am wrong. Did Korean car companies go around buying old used platforms and engines to design their cars on or did they develop their own? This really is a question. I am guessing they developed their own and went a different route than most of the Chinese factories.
What are the current JV contracts with foreign brands now? For how many years? It seems it might not be possible until after those have ended so the Government can really control the numbers of foreign branded cars being sold in China.
Hyundai DID go around using JVs to design their cars. See the Hyundai wiki.
Chung Ju-Yung founded the Hyundai Engineering and Construction Company in 1947. Hyundai Motor Company was later established in 1967. The company’s first model, the Cortina, was released in cooperation with Ford Motor Company in 1968. In 1975, the Pony, the first Korean car, was released, with styling by Giorgio Giugiaro of ItalDesign and powertrain technology provided by Japan’s Mitsubishi Motors. Exports began in the following year to Ecuador and soon thereafter to the Benelux countries. In 1991, the company succeeded in developing its first proprietary gasoline engine, the four-cylinder Alpha, and transmission, thus paving the way for technological independence.
@ abc
> Hyundai DID go around using JVs to design their cars.
Hyundai, Kia, and Ssangyong were not JVs.
Daewoo Motors was indeed a 50:50 JV between GM and Daewoo Texile. GM took the exit after getting fed up with management style of Daewoo CEO, then returned to take over Daewoo Motors after Daewoo went bankrupt.
The difference was that GM did not see Korea as a market but the source of car production for sale around the world, whereas GM sees China as a market, but not as the source of car production for sale around the world.
sorry but you’re wrong. Korea makers bought and were given american and Japanese IP in the development of their own. They took the same route as China.
That must be why they ruined their reputation and spent 10 years trying to rebuild it then.
What were the cars when they first came into the US? Self-developed or shared or old platforms?
@ Head Honcho
> What were the cars when they first came into the US? Self-developed or shared or old platforms?
They were engineered by Mitsubishi for Hyundai as unique models. They were actually new, engineered specifically for Hyundai use. Does not mean they were as good as ones sold under Mitsubishi brand, but Mitsubishi did not intentionally cripple them either.
Hyundai paid for Mitsubishi’s cost of engineering plus a 5% royalty on every car sold, and this relationship lasted until 1998. All new Hyundais from 1998 and onward are of Hyundai internal engineering.
At least China has decent self developed models now. Which is a lot shorter than it took both Korea and Japan.
Go have a look yourself. You really shouldn’t be talking here if you don’t know the least about Chinese companies.
@ Q
> Go have a look yourself.
I don’t see it.
Don’t talk then.
@ Head Honcho
> Did Korean car companies go around buying old used platforms and engines to design their cars on or did they develop their own?
Upto 1990 they licensed and outsourced their engineering to foreign automakers gain knowledge.
From 1990 and on they started engineering their own cars after having learned the trade by observing foreign engineers.
Two things that separated Koreans from Chinese was that
1. Koreans had money to license/outsource engineering, and piracy was not a part of Korean auto industry’s history.
2. Licensed/outsourced Korean cars were fully legal and Koreans honored by the terms of licensing contract, regardless of how restrictive it was.
> I am guessing they developed their own and went a different route than most of the Chinese factories.
Initial Hyundais were unique models engineered by Mitsubishi on an engineering outsourcing contract.
Initial Kias were unique models engineered by Mazda on an engineering outsourcing contract.
Initial Daewoos were licensed from Opel. Daewoo also licensed Suzukis and Hondas.
Initial Ssangyong were licensed Jeeps.
@ Head Honcho.
if i am not wrong it was the junk hyundai excel. they also had to pay mitsubishi some commission for every excel they sold so there must have been a deal between them
That car was junk. My aunt had one for 6 months and got rid of it. She was so excited about it when she bought it and then got rid of it because it had so many problems in the first few months. I wonder if there was lemon law back then.
@ Head Honcho
Hyundai’s defense was that they didn’t know how to fix the problems even if they wanted to, because they did not engineer Excel.
This is why internal engineering is so critical and “purchased” technology that Chinese automakers are using in their cars doesn’t work, because you don’t really understand how a purchased outside technology work so you can’t fix problems associated with it.
Friends,
Sorry but many of the comments found here sound too romanthic and the fact is just one, Know-How is just a commodity, nothing else!
Japanese Automotive Industry started on a way that the South Korean and now the Chinese are following, does not matter where they get the know-how from there is always technology and know-how for sale on the market, some of them have steal like the engineers of Daewoo, that sold the project lately to Chery. Just remember that the technologic base from South Korean Cars came from Ford and Mitsubishi (Kia, Asia Motors and Hyundai), from Mercedes Benz (Ssangyong), from GM (Daewoo) and from Nissan (Samsung). Today is much different, but these signs are still there. Like they will be for a long time in the Chinese and are since quite a long time mixed up into Japanese, European and USA Cars.
I believe that the reason why European and USA Industry is falling down into bunkrupcy or loosing their selling volumes belongs exclusively to the fact to not believe that other countries could develop a real powerfull and competitive industry like China did.
The fact is that PRC Government will instruct and it will surely take place, this is not just a mess like it is in USA where everyone wants to fullfill their own pocket firslty to than start thinking in whom pay their salaries. Chinese mind is much different from the USA mind.
There is still today the fact that European and USA Brands are still placing models in some markets which are far different from those sold in their countries. Sorry, but they still thinking we are just monkies!!!
Besides the fact that presently they are really afraid, otherwise GM would not close Pontiac, than Saturn and today Saab! To not allow the Chineses to use these names neither their network of dealers.
Come on, this is just business and strategy not a romanthic affair!
Best regards to all,
J.I.Hosang
You are right on most of what you said. But the part about everyone but Chinese not worried about filling their pockets? Come on. I know many people in the local government and have heard of people at BYD taking money to fill their own pockets. Yeah maybe they won’t have labor unions to deal with yet but I wouldn’t say there aren’t plenty of people in their companies filling their pockets already.
I’m guessing you work for BYD and you know how many of their employees are “filling their pockets”??
No I don’t. I am just saying what our landlord told us. They approached him about renting a building to them for dorms. THey requested 500,000 under the table for them to sign with him. They mentoned other departments doing similar things such as purchasers of steel. Yeah, hear say but when we have the fire department asking for money to sign off on us being under code and we already are. Isn’t hard to believe.
By under code I mean everything is up to code. Just wanted to be clear on that.
Oh yeah, what your landlord told you, cuz I’m sure his info is absolutely correct and accurate. Well, guess what, my landlord told me that stupid ppl like you should not be posting here.
Traven. I don’t believe you speak to your landlord. Doesn’t seem you are capable of speaking in a common manner that isn’t rude. You wouldn’t have a home if you talked to your landlord.
I don’t need to speak to my landlord because I own my home, unlike you. I’m sure your landlord would love speaking to a mentally challenged patient.
Also how about the Melamine in the milk scandal. Some people were willing to take other lives to pocket some extra cash. You are dreaming if you think Chinese don’t want to fill their pockets first.
oh yeah, like the Americans don’t? Everyone wants to fill their pockets, but that doesn’t mean you can go around spreading lies and then say “my landlord told me this.” There are scandals everywhere, just like the illegal drug scandal in the States.
The scandal wasn’t the point. They wanted to make money was the point. Yes just like illegal drug dealers. They were Chinese and not Americans in the milk scandal. There for Chinese are the same and want to put money in their pockets just as much as anyone else. Get the point?
and your point is?! Thanks for telling us something everyone knows, cuz before you told me, I just thought everyone in China wanted to be poor. Don’t post such stupid comments.
There are scandals everywhere, and noone needs you to tell me that we all want money.
There you go again misreading. I didn’t say all Chinese want money. The same goes for Americans. But many do. It is no different in any country. The only thing I see different is that everyone here in China are so open about taking extra money to make something happen. I have never seen it in the US and I ran businesses there way more years than I have been in China. I am sure it happens but I never experienced it like I have here in China.
okkk, and your point?? Open or not, it’s still taking money, still the same. Except in the States, they take money just to waste it, but in China, they “make something happen”.
>I have never seen it in the US…
Hellooo, are you blind? What about the CEOs of the already bankrupt companies taking billions a year in the States? What about the other billions handed out as “bonuses”? Bonuses for what? To reward them for going bankrupt and worsening the effects of the global economic crisis?! Not open?! Are you kidding?
Give me a break. That is a bunch of crap. Actually sounds pretty funny the way you put it because it is so ridiculous. I am going to let it slide on the humor side of things. You truly have a romantic view of China. That is great.
I am not blind. Everyone knows they are taking that money. It isn’t under the table. The fact that you know about it proves that everyone knows and it isn’t hidden. Yes, I agree it is ridiculous that they do that. I was talking about money under the table that isn’t recorded to the company receiving it. You know. Hand me 10,000 RMB and we will sign the paper you need. That kind of crap is what I am talking about.
haha, you stupid, ignorant and arrogant person, you’re full of BS. When the US wastes money, you see non of it, but when China takes money to make something happen, you jump out and accuse them with your crap.
Oh wow… traven, don’t even waste your time talking to HH, he is obviously crazy.
Traven what are you talking about?
“haha, you stupid, ignorant and arrogant person, you’re full of BS. When the US wastes money, you see non of it, but when China takes money to make something happen, you jump out and accuse them with your crap.”
Make some sense. You love to make wild statements with nothing to back it and then call everything else lies. Come on. Back something up or give it up.
About the melamine thing, a supplier of raw milk powder was recently busted again. It seems that the supplier was somehow able to regain possession of a contaminated batch of milk powder that had been seized by a local government agency last year, and then tried selling it to an unsuspecting buyer who did their own testing and caught the problem. It doesn’t take a genius to figure out that there were some “unofficial” dealings involved here.
And I’m not making this up – I heard it on the local radio (Beijing station).
Happy Holidays!
Before this gets totally out of hand. I am going to say I know not all Chinese are trying to fill their pockts first. The only difference is that it is easier to get away with in China and somewhat accepted as part of business. Hopefully this changes soon. They crack down it once in awhile like the Shen Zhen mayor this year but not nearly often enough.
why cant u just shutup gosh
Why don’t you. What is your problems. You guys are all in such denial. Make huge claims that everyone else is stupid and greedy. Chinese people are no different. I see it everyday. Quit putting yourself up above everyone and realize it.
Traven. Did I say Americans don’t care about making money? I said Chinese do too. Get over that you are Chinese. You are the same.
When did we “put ourselves above everyone”??! You are the one making foolish comments, trashing everything, and posting what could easily be made up lies. All we did was try to stop you from making a complete fool of yourself and correct your shit.
I like how you backed off on me being a liar. Could be lies. See you know I am not making it up. You just don’t want to admit it. What do I have to gain from BYD doing something like that anyway. I don’t own stock in any car companies i China or US or anywhere. After driving this weekend and being stuck in traffic on the way to work and the way home. I am thinking the big push on cars sales is a dead end. Where I am there are already way too many cars on the road. Takes longer by car than walking half the time. How many more cars can they sell here and people still be able to move on the road? I know I am in a pretty populated area but are the less dense areas buying as many cars anyway?
Winnie go stick your head in your hole of denial. I made no lies up. My factory is right next to the BYD factory. I don’t lie. Traven don’t be such an XXX.
There is a way to disagree with each other without being rude.
@ Head Honcho. You should give up on arguing with these people on here. I am Chinese and I would never be so rude to anyone even if I did disagree. Not all Chinese are so close minded that they only call names. I would love to be on their side since I am Chinese but they haven’t made a good point or statement. Calling someone a liar, idiot, stupid american just looks bad. Not all Chinese are rude. I may not agree with everything you say but I know it isn’t right to just yell out names. Not all people are educated in manners.
@ Traven and Winnie. Why call people names? Think things through. If you say rude things no one will listen. Be diplomatic in the way you speak but still get your opinion across.
@ Q Maybe you should just take some of your own advice and not talk unless you can learn to talk back to someone in a respectable way. Rude comments do nothing for the Chinese reputation. You realize you are trying to represent your country?
and I suppose Head Honcho trashign everything, making up lies, calling others names and etc. will help? I will talk less when HH stops posting comments that are moronic and senseless.
No lies. You just can’t take the truth. You have no experience running a business in China do you Q. If you did you would know everyone has their hand out for an envelope full of money.
Q. You won’t talk any less. No lies put out there. You just have this romantic notion of China that everything is done right and better than ever other country. I have never lied here. Come visit me and I will put you in touch to prove everything I have said. I bet even then you wouldn’t admit I didn’t lie.
No lies,eh?? Why would I trust YOU?! After ALL these BS and LIES you’ve made up. I know what China is like, and I’ve lived in China for a lot longer than you have. You need to wake up instead of daydreaming that the U.S. is always the best, and everything in China is crap. You’re right, I won’t talk less because you are still making noise.
Head Honcho, you obviously don’t know what China is like, based on your comments, so why don’t you do us all a favour and keep your mouth shut.
Wes. I have lived here the last 5 years. I started and run a factory here. I know exactly what China is like. If you don’t like it sorry but that is my exerience. Do you run a business here? Please share if you have never experienced any of what I am talking about.
Q. No BS no lies. I ever said the US is better. There you go again. Why do you keep assuming this. I have NEVER said that. But you just keep assuming it and saying it. There is no point in arguing over something that was never even said. Good luck working that angle.
y dont u go stick ur head in a hole of s***. btw im not chinese chinese lecture
1st comment was @ heand honcho
So original Winnie.
go stick your head in a trashcan trash talker
Better. lol
Its Christmas for christs sake, go have a big lunch and stop arguing with yourselves.
Merry Christmas Ash.