Geely’s high hopes not yet dampned by a hard reality
This years Beijing Auto Show showed that Geely do have the flair and the will to produce a mass range of cars from electric buggies, to mid size pick up trucks, but they don’t have the market yet in China to put all of their models into production. The Associated Press has a very good article on what might happen to Geely post Volvo purchase, and more importantly what will happen with the Chang’an-Volvo joint venture now that Volvo is owned by Geely.
Chinese tycoon Li Shufu’s car company Geely has a knack for giving its vehicles oddball names: Gleagle, King Kong, Englon.Not as memorable for buyers of the King Kong and its stablemates is a standard of quality that’s so-so even by the Chinese auto industry’s standards.
Zhejiang Geely Holding Co.’s $1.8 billion acquisition of Sweden’s iconic Volvo Cars from Ford Motor Co. could offer a shortcut to recognition and better quality for Li’s auto empire. But there are growing doubts over the odds for success for a deal that in China is likened to a “snake swallowing an elephant.”
Experts working in mergers and acquisitions question Geely’s ability to successfully meld corporate cultures so alien to each other — one a private business manned by migrant Chinese workers with modest expectations and the other a much bigger, union-dominated work force used to a more democratic managerial style.
And despite Beijing’s apparent support for Li’s daring foray into the European auto market — China’s first major takeover of an international automaker — the government planning agency whose approval is required for the deal to go through remains noncommittal.
“If the company proposes a reasonable plan, we will take a positive attitude,” Zhang Xiaoqing, a deputy minister of the National Development and Reform Commission, China’s economic planning agency, told a recent government conference. NDRC officials would not comment further.
Officials vetoed another unlikely auto deal — heavy equipment maker Sichuan Tengzhong’s bid for GM’s gas-guzzling Hummer brand.
Geely says it is cobbling together $2.7 billion, using a melange of loans, overseas investments, local government funds and its own cash hoard, to cover the $1.8 billion deal and operating costs after it takes over.
“I would be happy to see Geely do a great job, but I have my doubts. Li Shufu should realize that he cannot solve every issue just with money,” said Zhang Xin, an auto analyst at Guotai Jun’an Securities in Beijing.
Some of the financing is bound to come from the local government wherever Geely sets up its Volvo China headquarters. On Monday, an official in Shanghai’s Jiading district confirmed the automaker was considering putting a factory in its industrial zone — a move that would boost the city’s own automaking aspirations and put Volvo at the heart of China’s most affluent region.
Geely would not comment on the plan, which would also require NDRC approval.
Li has far more than his reputation as a sharp businessman riding on this deal. In Volvo, Geely gains a coveted foothold, albeit a shrinking one, in Europe, and an immediate doubling in its overall capacity — moving it closer to the 1 million unit annual output that experts say is key for profitability.
Volvo workers also have much at stake. After four straight years of annual losses, the 80-year-old Swedish brand must weather the transition to Chinese ownership without losing its reputation for building safe and sturdy cars.
Many believe it can only do so if Geely honors its pledge to keep a major share of production in Europe.
“If it turns out that they move things from Sweden as soon as possible, I think that will be seen as some kind of betrayal and people will get angry,” said Viktor Bolin, a 30-year-old Stockholm PR consultant who drives a Volvo C30. “Volvo won’t be Swedish if they have only eight employees in Sweden.”
Geely lacks experience in managing Europeans, though it has patiently built up its relationship with Manganese Bronze Holdings PLC, setting up a joint venture to make boxy London Taxis in western Shanghai.
“The formula for success will be to embrace and learn from the existing Volvo management instead of to dominate it, not trying to smother or conquer it,” said John Bonnell, an analyst with J.D. Power in Bangkok.
Li has come a long way since he started out making refrigerator parts and then motorcycles, turning Geely into a major domestic manufacturer without the government support and partnerships with big foreign manufacturers enjoyed by its state-run rivals.
Thirteen-year-old Geely was China’s 10th largest automaker last year, with 330,000 units sold in 2009, up by nearly 50 percent from 2009. But its success has hinged on selling inexpensive sedans in booming China and other developing markets; forays into premium markets have so far fallen flat.
Geely’s quality has improved, analysts say, but it still lags some of its Chinese peers. A 2009 survey by the Beijing-based private research group Lansion rated it 14th among 35 brands in China — below its domestic rivals BYD and Shanghai Roewe.
Following the raft of recalls at Toyota Motor Corp., quality problems would be disastrous for any brand, so keeping Volvo’s expertise intact will be essential to preserving and expanding its market share in the U.S. and Europe — its biggest markets.
With Geely’s support, though, Volvo could gain a potentially much bigger foothold in China, now the world’s biggest auto market with sales at 13.6 million vehicles last year.
The Swedish automaker sold 22,400 vehicles in China last year, up 80 percent from the year before, but it trails behind rivals like BMW and Audi.
“Having Geely as a partner definitely will help the Volvo brand to have larger operations in this fast-growing market,” said Yale Zhang, an analyst for CSM Worldwide in Shanghai.
“It’s a good time, as people are starting to upgrade their vehicles. People want to upgrade to luxury cars. It’s a very good chance to catch that trend,” Zhang said.
Volvo must ramp up sales if it is to operate profitably.
“We will find a way to let Volvo’s technology play a better role and to expand their scale in order to lower the costs,” Li said at the March 28 deal signing in Goteburg, Sweden.
But analysts question how Li can cut costs enough without breaking his promise to keep Volvo’s production mostly in Sweden, rather than lower-cost China.
Ford failed to do much with Volvo Cars after buying it in 1999 for $6.45 billion — sales remained mostly flat, peaking at 458,323 units in 2007 and falling to about 335,000 last year.
Busy nurturing its core business, Ford in 2008 also sold off Jaguar Land Rover, to India-based Tata Motors, which saw the troubled luxury brands swing to profitability in the last quarter of 2009.
“Some are positive and say it cannot get any worse than it was under Ford,” said Marcel Marttila, a 47-year-old Finn who has worked in a variety of jobs at Volvo over the past 25 years and is now a test driver.
“I am skeptical. I would have preferred a Swedish or European owner,” Marttila said.
Zhang and other analysts say they expect Geely to eventually build a new factory that might produce Volvos as well as its other brand cars — though it remains unclear where.
Initially, Geely will keep production arrangements in Europe and contracts for assembling 15,000 cars a year by a Ford joint venture, Changan Ford Mazda Automobile Co., in Chongqing. The longest of those contracts runs until 2018.
For now, Li says he intends to keep the brands separate.
“Geely is Geely, while Volvo is Volvo. Geely will not produce Volvo, and Volvo will not produce Geely,” he said.
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Do you think it was easy when Toyota showed up in California trying to buy a storefront to sell their cars? Or when Honda when went into Marysville and asked for local help in making their first transplant work? In preparation I would bet they studied the earlier Volkswagen failure in Westmoreland very carefully.
The cross cultural issue is an elephant of a challenge, but if Chairman Li plays his cards right and brings non-Chinese into the decision making process he will do OK.
Maybe if Toyota would have added an American, or a European, to the board membership long before Jim Press, they wouldn’t be in the stew they are in today.
Also if Li is smart he’ll also have a look at Hyundai’s bull-in-a China-shop blunders as they first encountered Canadian and American culture.
On the other hand, Brilliance proved that Chinese automakers are no Japanese and Korean automakers, by announcing an exit from the European market.
Sales of Brilliance BS4 and BS6 never took off in Europe, amounting to a few hundreds sold over 3 year period. Could Geely repeat the fate of Brilliance outside of China?
We will see.
I highly suspect Brilliance’s failure in Europe was driven in large part by ADAC’s shameless effort to take them down.
http://www.i3china.net/bs4
Japanese and Korean automakers have done the same in the past (fail to establish themselves in a market and leave).
With Brilliance’s cars and odd pricing, their exit is no surprise.
@ Analyst
> With Brilliance’s cars and odd pricing, their exit is no surprise.
There is no market for Chinese cars in Europe or US, because there is no meaningful cost difference of ownership between Chinese cars and Japanese/Korean cars, where insurance, repair/maintenance, tax, and resale value constitute the biggest portion of total ownership cost, not the purchase price.
The only place Chinese cars could sell are Africa and South America.
There is a market, and they will be there one day despite your rantings.
@ CCT
> There is a market, and they will be there one day despite your rantings.
We will see how BYD does in the US since they just announced the location of their new US headquarter in downtown LA.
If BYD can’t make it in the US, then that’s it for Chinese cars in the US, right?
I don’t think it’s the right time for them to come here yet.
Their quality standards are still below what the American consumer is used to, and first impressions are very important.
Just ask Hyundai.
Did the Japanese or Koreans achieve instant success? Brilliance was sabotaged, and there is always a second try, a new start, especially for a young company like them.
Brillance were only sabotaged by the crap crash test results of their vehicles. The European & US markets will open up if the cars are of sufficient quality, safety rating and at a price that under cuts the Korean’s.
Brilliance was sabotaged by ADAC.
htp://www.i3china.net/bs4
A car that deserved 3 stars was given inexplicably 0 stars.
The truth is the ADAC is full of shit, they will do everything they can to drive people away from non-German cars. Their latest victim was the Citroen Nemo:
http://www.youtube.com/watch?v=bCmB0UVdx8E
Gotta love the ominous music when they drive it
http://www.autoblog.com/2009/03/26/video-brilliance-bs4-fails-german-crash-test-with-zero-stars/
It failed pure and simple, and so did the BS6
Did you not read it?
http://www.i3china.net/bs4
The car was worth 3 stars, and was given 0 stars.
That is sabotage.
@ Bilbo
> Brillance were only sabotaged by the crap crash test results of their vehicles.
Not at all, Brilliance has only themselves to blame for zero score crash test.
> The European & US markets will open up if the cars are of sufficient quality, safety rating and at a price that under cuts the Korean’s.
Hyundai was almost ready to quit the US market when it was the lowest priced automaker in the US. Hyundai is reporting record sales in the US when their MSRP are raised to match Toyotas. Why? Think about it.
It is not the price, but value that sells a car.
More power and better interior at same price means value.
Poor quality at less price does not mean value, it’s waste of money.
“Not at all, Brilliance has only themselves to blame for zero score crash test. ”
Interestingly, out of the 4 organizations involved in the crash test ADAC was the only one who thought the BS4 deserved zero stars. Austria’s ÖAMTC, Switzerland’s TCS, and the Dutch ANWB all agreed it deserved at least 3 stars.
“Hyundai is reporting record sales in the US when their MSRP are raised to match Toyotas”
That’s a bit of an overstatement, don’t you think?
Thats because the German safety standards are the highest in Europe…………yes I read it, it got a zero rating under the new criteria but would have got 3 under the old, so how can that be sabotage? The safety standards have been increased and applies to all car manufacturers.
Because the new standards went into effect on February 2009.
How does it make sense to test a car according to new criteria if it was launched in August 2008?
Furthermore, the new standard only says that a car without ESC can’t get 5 stars, not that it will automatically get 0 stars.
In fact, the Citroen Picasso, evaluated according to 2009 standards, scored 4 stars adult safety (29 pts), 3 stars child safety (37 pts), and 2 star pedestrian safety (16 pts). But it got 0 points for ESC since it’s not standard fit. Yet, the final star ranking was 4 stars! How?
http://www.euroncap.com/results/citroen/c3_picasso/2009/344.aspx
Bilbo, you have no idea what you are talking about. Soon, Brilliance will pay back what ADAC did to it. There is a big difference between 0 and 3 stars. Shame on Germany and ADAC.
Both cars failed the latest Euroncap test, pure and simple…….there really are some posters on here with major issues!
The Picasso got about 76% for child occupancy & 81% for adult, those are good figures and contributed to the 4 stars.
Does safety not matter to you? Just look at the pictures of the crash tests of the Brilliance cars, one is a f**king disgrace and the second is better……which is a good thing. It shows the manufacturers are taking note and improving their designs. Oh wait, maybe its a secret government program to reduce the Chinese population?!
Bilbo, I wonder if everything is going over your head completely just because you don’t understand or you are just trolling – again.
The Brilliance BS4 got 65% adult safety, and 71% child safety. The BS4 had a strong case for 3.5 star overall score and lost all stars (wtf?) due to the lack of “speed limiter and ESP/ESC”.
The Picasso had a borderline 4 star overall score but didn’t lose any stars because of the lack ESP.
Want more damning evidence? The Citroen Nemo. It got 59% adult safety, 74% child safety. The Nemo also lacks speed limiter and ESP/ESC. Overall score? 3 stars.
http://www.euroncap.com/results/citroen/nemo_kombi/2010/394.aspx
Is the BS4 a safe car for European standards? Not really. But a zero star rating implies it has no safety at all, which is completely untrue.
I’d much rather trust the experts at EuroNCAP than the opinion’s of a blinkered Chinese. Why can you not accept that it failed, got a zero stars based on tests and the criteria set out by EuroNCAP?
Why not look at the positive and see that the car’s had been shown to be dangerous in an accident and that Brilliance got a wake up call. Would you be happy to drive one having seen the results of the crash test (not just the scores but the actual images of what happened to the cars)?
That’s where you are wrong, Bilbo. Not only you are wrong on your assumption that I am Chinese (I am not), but also the BS4 has NOT been tested by EuroNCAP. All cars tested by EuroNCAP are on their official website, http://www.euroncap.com.
The BS4 was tested by a consortium of agencies and organizations that DO perform official Euro-NCAP tests, namely ADAC (German), TCS (Swiss), ANWB (Dutch) and ÖAMTC (Austrian), but this test was UNOFFICIAL. Now, all these organizations (except ADAC) gave the BS4 a 3 star rating.
It seems like I am not the one being “blinkered”. Why do you accept ADAC’s rating but dismiss the other ones? Read ADAC’s report (in German), and they justify their rating by the lack of ESC and speed limiter. EuroNCAP guidelines do not mandate docking a single star because of that, let alone all 3 (as seen with the Citroen Nemo).
Finally, looking at the actual images, it appears that the car’s passenger compartment held up pretty well. And here’s a real-life crash test of the BS4. If you don’t understand Spanish, I’ll translate the important parts for you:
“The car had been going over 100km/h (62 mph), when the driver lost control, hit a barrier and rolled over a few times. After the accident, the doors opened with ease to reveal a dazed driver that sustained minor injuries”.
The cars is all wrecked (which happens when you flip at 60 mph), but the passenger compartment is relatively intact.
Would I pick a safer 4 or 5 star car if I could? Absolutely! Is it a deathtrap like the BS6? Definitely not.
By the way, I am not the only one calling shenanigans on this one. Right after the results were published, German magazine Focus published an article titled “Gut gekracht, schlecht bewertet”, or “Well crashed [performed well], poorly rated.”
The magazine points out:
- Euro NCAP is not an official standard. The rating is not relevant for a car being legal in Europe or not. Manufacturers voluntarily submit their cars to the test – devised by manufacturers and consumer protection organizations.
- The timeline “makes you wonder.” The BS4 was introduced in Europe in October 2008 while the old Euro NCAP rules were in effect. Under these rules, it would have received 3 stars. How come the ADAC finds it necessary to test a car introduced last year according to a standard introduced in February this year [2009]?
- The magazine says “To the unsuspecting buyer, the zero stars suggest an absolutely unsafe car – which the BS4 definitely isn’t. It doesn’t crash brilliantly, but solidly.”
As you are obviously unaware, ADAC is an organization in bed with the German manufacturers. You will NEVER see the ADAC publish anything negative about a German car. Anybody else will be bashed whenever they have an opportunity. See the Citroen Nemo’s failed “moose test” for example:
http://www.youtube.com/watch?v=bCmB0UVdx8E
Don’t you love the ominous music they play when the Nemo takes the road?
They may be biased but you cannot blame one organisations test results for the failure of Brilliance in Europe? I wouldn’t buy any brand new car that didn’t have a 4 or 5 star EuroNCAP rating.
Of course the crash tests weren’t the only problem. It was one of the problems. The truth was Brilliance’s cars had no competitive edge. There were better cars available at the same price, why would anyone buy an unproven car?
Now the bigger problem is, of course, the general idea that all Chinese cars are unsafe. That was obviously the ADAC’s intention when they tested the BS6 and the Landwind SUV (the ones that failed miserably). There was no real reason to test cars that had such low volume in sales, other than to terrorize people.
Obviously the Chinese companies in question have to blame themselves more than anyone else, for bringing cars to Europe they knew (hopefully) would perform horribly in a crash test. Now the notion that all Chinese cars are unsafe is deeply ingrained in people’s minds.
Bilbo, does the truth not matter to you?! DO you think it’s FAIR for ADAC to be picking on a company like Brilliance?! Do you think it’s fair to tell the public(which doesn’t have much idea about Chinese cars in the first place) their cars are totally unsafe when they actually deserve 3 stars?! Brilliance’s name is tainted by this outrageous lie, and that’s not okay. It is not okay for ADAC to be sabotaging ANYONE, not just Brilliance. I have no idea what goes on in your brain, but it is unbelievable that you think this is okay.
What is unbelieveable is the paranoia and bias on this site but some of the commentators, there is no sense of perspective.
So ADAC in their opinion and based on the EuroNCAP rating system in place at the time gave a car a zero rating, the priority has to be human safety and in my opinion they did not give a zero rating to sabotage the Chinese car industry they did it to highlight a car on sale with very poor crash protection.
So far I have not seen the official EuroNCAP report for the Brilliance cars tested but the original one folded like a tin can and from the video’s I’ve seen gave very litte crash protection.
It’s not “paranoia”. I won’t contend the BS6′s rating (the one that folded like a tin can), but the BS4′s rating was messed up. If it had very poor crash protection, why did they award it 3 stars front impact rating and 4 stars side impact rating?
EuroNCAP’s guidelines are easily accessible, and with the numbers provided by ADAC, they deserved a 3 star overall rating.
Of course you haven’t seen official EuroNCAP reports, because there are none. These tests were unofficial, and as such, the organizations involved have zero accountability.
Take a look at cars officially tested by EuroNCAP:
2009 Toyota Urban Cruiser: 58% adult safety, 71% child safety. Standard ESC, No Speedlimiter. Overall score: 3 stars.
2009 Suzuki Alto: 55% adult safety, 46% child safety. Optional ESC (1/3 pt), No Speedlimiter. Overall score: 3 stars.
2010 Citroen Nemo: 59% adult safety, 74% child safety. No ESC, No Speedlimiter. Overall score: 3 stars.
2008 Brilliance BS4: 65% adult safety, 74% child safety. No ESC, No speedlimiter. Based on the observations above, fill in the overall score yourself.
Is there an actual report by ADAC? In their opinion they gave the rating they did, in your opinion it deserved more………..but you are biased and so may ADC be too.
The official EuroNCAP protocol for overall score is available here.
The weight factors are as follows: (table 3.1, pg 4)
Adult occupant protection: 50%
Child occupant protection: 20%
Pedestrian protection: 20%
Safety Assist: 10%
BS4′s numbers put it at a weighted score of 49%. That’s a 3 star rating according to on table 3.2 (page 6).
Yes, the ADAC report (along with all other agencies’) is available here:
http://www.i3china.net/bs4
EDIT: ADAC’s taken their detailed report off. All other agencies still have theirs though.
Thats an opinion site, I’m interested to read the real report…….3 stars is still not good enough.
Why doesn’t Brilliance fight back, if their cars are better than the rating given why not get another independant body to conduct the EuroNCAP tests?
Yes, it’s an opinion site, but if you scroll down you’ll find links to the reports. Not good enough… Yes. Totally unsafe… No.
Because there’s no need to fight back – the reports gave it a 3 star adult occupant safety rating (3 star front impact rating, 4 star side impact), 3 star child safety. They just happened to have NSFW’d the overall score.
How can a USA investor buy stock in Geely
Datsun (later Nissan) left the US and Europe after the 50s debut but came back stronger.
Please don’t group the Korean automakers and Japanese makers together, they don’t belong to the same league.
@ mememe
> Datsun (later Nissan) left the US and Europe after the 50s debut but came back stronger.
Daturn(aka Nissan) never left USA.
> Please don’t group the Korean automakers and Japanese makers together, they don’t belong to the same league.
You may be right.
http://www.caranddriver.com/reviews/comparisons/10q1/2010_honda_accord_ex_vs._2011_hyundai_sonata_se_2010_subaru_legacy_2.5i-comparison_tests
Japanese who heard about this news were actually “cool” about this outcome, since they are used to Koreans overrunning Japanese in industries that used to be dominated by Japan in the 90s, so why should automobiles be an exception? Honda was getting risk averse and sedate while Hyundai was pulling everything out, so the day of Hyundai Sonata beating Honda Accord in C&D’s comparison test was inevitable.
http://www.autoguide.com/auto-news/2010/04/honda-ceo-not-satisfied-with-automakers-recent-performance.html
“The Accord recently lost a major Car and Driver comparison test to the Hyundai Sonata, while the CR-V faces stiff competition from a growing segment, including Hyundai’s new Tucson. Ito also cited Hyundai as a major threat, and said that Honda must change its course to compete with the Korean giant. “The biggest problem is we’re not selling the value of our products. We have to improve the performance of our products as well.””
Honda CEO Takanobu Ito says Honda must change its ways in order to better compete with Hyundai.
Why hasn’t this Korean Douchebag been banned yet?
Because even though many of us disagree with him, he provides interesting insights, with links to various articles to support his opinions – and he also never types words like “douchebag” here. Whoever you are, grow up and have a little more etiquette in a public forum.
He was banned, he finds ways around it with different IP’s.
Thanks for the info, but if you want to bash Chinese cars and advertise/promote Korean ones, do it at koreancartimes.com, not CHINAcartimes.com
@IHC: Do you know what has become of Ssangyong and SAIC’s stake on it?
Regardless, it doesn’t seem like they are learning anything about marketability of gas-guzzling SUV’s. Just saw their new Korando C concept. It’s the best looking Ssangyong to date, but still… a SUV.
@ Analyst
> Do you know what has become of Ssangyong and SAIC’s stake on it?
Ssangyong is going through a court-supervised auction as a going-concern. SAIC’s stake has been reduced from 50% to 12%, and Ssangyong cut off all data sharing with SAIC so SAIC no long has any access to Ssangyong design plans.
> Regardless, it doesn’t seem like they are learning anything about marketability of gas-guzzling SUV’s.
Ssangyong actually planned to diversify, and this is why they agreed to a sale to SAIC in the first place because of SAIC’s promise of a $1 billion cash injection to raise cash needed for expanded product line up in sedan and compact cars.
> Just saw their new Korando C concept. It’s the best looking Ssangyong to date, but still… a SUV.
And s161, aka Roewe 150.
But we digress…
“….what will happen with the Chang’an-Volvo joint venture….”
Nothing will happen other than the expiration of the assembly contract in 2018, as Ms. Kurtenbach of AP tells us. Then competitor Chang’an will be out of the picture.
Here is a question : Which one do you prefer , a Honda or Hyundai ? (lol i know the name sounds similar you know why). If that question was a bit tough to answer then next question, which one do you DEFINITELY go for between a Honda and Hyundai without 5 years warranty ? Between a Hyundai and Honda of the same price tag and no warranty, which one would u go for ?
The korean cars nowadays are still competing on prices and a warranty that no other makers offer. They don’t offer the wow factors or anything that would entice the buyers. Just remove the warranty and raise the price up and see if they still sell.
@ mememe
> They don’t offer the wow factors or anything that would entice the buyers.
The primary selling point is styling(In case you just came out of a 10 year coma, biggest buzz generators at auto shows are Hyundais and Kias nowadays) and engine power(They now routinely outpower equivalent Honda and Toyota engines by 10~15%. It is no accident that the best Asian V8 engine of Ward’s annual 10 best engines of the world award is a Hyundai V8 engine). Price is no longer a consideration every since Hyundai-Kia implemented a policy to match Toyota’s MSRP.
Interestingly enough, Hyundai and Kia sales are going up just as their MSRP are going up. Why? Because price never was a primary consideration in a new auto purchase. This paints a bleak picture on Chinese automakers hoping to compete overseas on price, because consumers wouldn’t care unless the price was like 30% lower than equivalent Toyotas or Hyundais.
I’d love to see KIA and Hyundai to remove their warranty and raise up their cheap price, we shall see if your argument will still hold.
@ mememe
> I’d love to see KIA and Hyundai to remove their warranty
Warranty reduction is not possible.
Automakers are going hybrid, plugin, and electric, which require 10 year/150K mile warranty in California and 10 other states regardless of make, be it Hyundai, Toyota, or Honda.
So if you think Toyota doesn’t offer a 10 year warranty, they do on select models.
> raise up their cheap price
Sonata MSRP : $19,195
Camry MSRP : $19,395
Accord MSRP : $21,055
which wow factor ? the Equus that looks like a mix mercedes, lexus or the new ix35 that look like the Mazda CX-7 and Ford Kuga ?
@ mememe
> which wow factor
Reader responses at places like autoblog and motor trend.
I remember one Japanese blasting C&D comparative testing, because he claimed that C&D gave so much scores on Sonata’s styling and that’s why Sonata beat Accord, not because Sonata drove better than Accord.
So yes, “stunning” is the word used to describe current Hyundai and Kia styling in western world.
“Reader responses at places like autoblog and motor trend.”
Places which were overrun by Hyundai shills and Korean nationalists like yourself.
It’s been months already, and I have seen very few Genesis (either the Coupe or the Sedan) on the roads over here.
“So yes, “stunning” is the word used to describe current Hyundai and Kia styling in western world.”
I’ll agree that it’s gotten a lot better, but it’s a far shot from “stunning.” Beating Toyota (in styling) doesn’t constitute “stunning”.
@ Analyst
> Places which were overrun by Hyundai shills and Korean nationalists
Autoblog overrun by Korean nationalists? Why don’t you suggest that at Autoblog and see how the posters respond to your accusation.
Internet is very different outside of China, where there is no censorship.
> It’s been months already, and I have seen very few Genesis (either the Coupe or the Sedan) on the roads over here.
And where do you live? I saw three on my commute back home today.
> I’ll agree that it’s gotten a lot better, but it’s a far shot from “stunning.”
http://www.boston.com/cars/newsandreviews/overdrive/2010/04/in_new_york_automakers_reveal.html
Boston Globe calls Kia Optima stunning.
http://www.greencarreports.com/blog/1044081_smaller-more-efficient-engine-example-2010-buick-lacrosse
Greencarreports call Sonata Turbo stunning.
http://www.trafficmagonline.com/evolution-of-hyundai%E2%80%99s-fluidic-sculpture-continues-as-stunning-new-concept-car-prepares-for-geneva-debut/
Traffic Magazine calls Hyunda’s design theme stunning.
> Beating Toyota (in styling) doesn’t constitute “stunning”.
Stunning design is usually the biggest buzz generator. NY Auto Show’s biggest buzz generator was Kia Optima.
The new Elantra is really good looking.
I really like Hyundai’s new fluid designs, not so much Kia’s.
To me Hyundai are just trying to ape Toyota’s designs, at least Kia is doing something different…….take the Kia Soul?
“Internet is very different outside of China, where there is no censorship.”
Are you kidding me?! Ever heard of a country called the United States of America?!
BTW, Google censors its results in other countries as well.
Censorship is everywhere, but you are way too foolish to notice. There is no point in putting up a few positive comments by others, as I can find you plenty of negative ones, so as I’ve said, there is no point.
I personally think that Kia and Hyundai’s design are far from stunning, and there is nothing you can do to change my opinion.
Memememe – the current Kia Sorrento diesel is about to launch in China (or did last week) and has some seriously good reviews down under:
http://www.caradvice.com.au/53348/kia-sorento-review-long-term-update-2/
Now there is nothing here in China that can rival it, aside from the Toyota Highlander V6…. which is a lot more expensive.
The Kia represents fantastic power and comfort for such a low price (although the price hasn’t been released yet, around 280,000rmb)
“Explaining the Chinese Car Industry and Chinese Cars”
These irrelevant postings only serve to dumb down the CCT forum. Why not just start another thread and move this off the subject dialogue there?
@ dragin
> Why not just start another thread and move this off the subject dialogue there?
Read your very first post of this thread, and you will realize that it was you who got this thread off track.
WRONG, IHC – YOU pulled this off topic. dragin kept his comments with the context of the original thread, and concluded his original statement to maintain Geely as the main subject within his post (his Hyundai comment is not critical, just factual)………you use baited statements that invite incendiary remarks –
“On the other hand, Brilliance proved that Chinese automakers are no Japanese and Korean automakers, by announcing an exit from the European market.”
“The only place Chinese cars could sell are Africa and South America.”
“If BYD can’t make it in the US, then that’s it for Chinese cars in the US, right?”
This is a issue of semantics…..I chose these 3 examples for a reason. The first example was the VERY FIRST THING YOU TYPED IN YOUR FIRST POST IN THIS THREAD – you opened the doors right there for inflammatory remarks. The 2nd and 3rd examples are from 2 of your posts where you ENDED the post with these remarks, which absolutely invite someone to respond in a negative manner.
Now I remember why CCT has attempted to ban you so many times. You are obviously a intelligent person, yet you insist on posting things that you KNOW will upset people due to the way in which you present your remarks. I will not insult your intelligence, but I WILL criticize your purpose for posting here. I thought I was being respectful in attempting to defend you in one of my earlier posts……that was a mistake on my part and I apologize to all other CCT posters for my “mental flatulence”.
On my computer the topic that appears at the top may be different from what others see.
I thougth it was about Geely’s chances of making a go of this unprecedented investment they have made as a Chinese company seeking technology in the global auto industry.
But I may be wrong…….
dragin…..you are so right. I think when it comes to Volvo, here’s what going to happen – NOTHING. Let’s look back at Volvo when Ford bought them……did we all of a sudden see a lot of “Folvo” cars on the streets? NO. Same with Geely – we are NOT going to see a bunch of “Gelvo” cars either. Geely is not stupid – they know the eyes of the automotive world are upon them right now, and they aren’t going to do anything brash or illogical. I think the last statement that Li Shufu made in the article says it best….”Geely is Geely, while Volvo is Volvo. Geely will not produce Volvo, and Volvo will not produce Geely”. Simple. To the point. Any more questions?
One more thing – for all of you out there that like to bash on Geely cars…….how many of you have actually seen a Geely with your own eyes? How many of you have actually sat in one or driven one? I know Ash and Head Honcho live here, anyone else? For those of you that still assume that Geely is “crap” or “garbage” or any other insult you want to use……..YOU ARE WRONG. Read all the reports you want, post all the links you want, but the bottom line is this – I’ve seen them, been a passenger in them AND driven them (Vision, King Kong, Panda, Haoqing, Merrie….I’ve driven a good number of Geely cars, old and new). The OLD Geelys? Sure, insult all you want, I’ll probably add a few of my own. The NEW Geelys (Panda/Vision)? GOOD CARS – not great, not crap or garbage – but very good. The Vision in particular – surprisingly quiet and comfortable, the 1.8 engine gives you enough power when you need it (sluggish in acceleration, but like I said – it’s a good car but not a great car), air bags for all occupants in the car, really good GPS/DVD/stereo/climate control system, light steering that does not feel dead or numb, responsive brakes that don’t fade….it is a good car – with very good quality control inside and out. Would this car sell in America? No, it’s still not up to that level yet – but it DOES NOT MEAN IT’S BAD. You want to tell me I’m wrong, feel free to – once you’ve actually had first hand experience that is. Until then, SHUT UP – or follow the example of a poster like dragin…….his posts are honest and his opinions (both positive and negative regarding the chinese car industry) are always well thought out. He never bashes or insults, yet he can offer real criticism in a adult manner.
Geely in on the right track people…….if you can’t accept that or refuse to believe it, that’s your problem. IN fact, the biggest competition that Geely has right now is……….Geely. They are having to compete with themselves to erase the old reputation that so many of you want to hang on to – and that is probably the hardest competition there is.
I am not sure if Geely fits the bill of “The Chinese auto company dedicated to quality”. Certainly Geely is no Chery or BYD, but it is no SAIC either.
Look at how SAIC is taking an extra time, money and effort to make sure that the cars they release aren’t junks like your typical Chinese brand car. Geely by comparison is releasing so many new models so fast that quality is guaranteed to suffer.
As you may have noticed, I do not rip Roewe(other than milking Ssangyong), I only rip the likes of BYD, Chery, and Brilliance that are taking a short cut path to making a quick buck while ruining their brands in the process.
This kind of thinking is different from Japanese and Korean automakers, who were willing to take a loss for upto 10 years to establish a brand. How many Chinese automakers have the gut to take 10 year losses to get themselves established in the US? I can’t think of any, not even SAIC was willing to take losses for 5 years.
IHC, this is a thoughtful post with some interesting viewpoints – some of which I totally agree with, some I need to “clarify”. First, about SAIC – I agree, they are taking time to give the market some fresh and exciting cars (I especially love the Roewe 350 and the EV concept). In regards to Geely – I think you are smart enough to realize that Geely is NOT going to release 39 new cars! We’ve discussed this in another post – many of the cars Geely had at the Beijing show are “production ready” (or close to it), but Geely won’t put them into production unless there is a sufficient market for it. Also, the “39 new cars” IS a bit of a misnomer – for example, the SX5 is simply a cross version of the GC5-RV…..same chassis as well as much of the body work. My guess is that in the next 2-3 years, we’ll see Geely put 12-15 of these new cars into production – essentially “filling out” the brand lines of Emgrand, Englon and GLEagle. A lot of the cars will share engines, transmissions, etc., so I don’t think quality will suffer much, if at all.
I can understand ripping on Chery and BYD, many of us have as well – but we have ALSO commented on the fact that BYD is at least attempting to get away from pure cloning – a step in the right direction. Chery DOES seem to lack a focus and direction right now…..while Geely is starting to define their 3 brand lines with clarity, I don’t see that with Chery/Riich/Rely. I see model overlap and no clear reason WHY they need 3 brand lines – it simply is a confusing melange of cars right now. I don’t understand though, why you would rip on Brilliance – they’ve NEVER cloned anything, they have some nice cars (the FRV is a stunner – well built, very attractive and Brilliance can’t make enough of them right now) and also take their time to put out a good car (like SAIC). Where are they taking the “short cut path”?
Finally, in regards to a chinese car company taking 10 years of losses to get established in the US? You’re right – but then again, NO car company would nowadays – chinese, japanese, korean, european, it makes no difference – today’s business world and shareholder demands of a quick return on their investment won’t allow a 10 year time frame. The 1960′s-1970′s were a different time for business as well as society in general – businesses had time to grow and develop in a more patient manner compared to today’s world. Can a chinese company have success in the USA today? Of course – but it’s going to need to be a great car, well marketed and promoted, AND it needs to fill a need in the consumers mind – I think some of the new EV/hybrid cars we’re seeing in China could do that nicely. EV’s WILL be hot items in 5 years or so, and China COULD be in the right place at the right time if they do it right.
@ joninchina
> we’ll see Geely put 12-15 of these new cars into production
That’s too many for a company of Geely’s size.
> – A lot of the cars will share engines, transmissions, etc., so I don’t think quality will suffer much, if at all.
Toyota had a similar strategy, and it came to bite them in their behind… So if Toyota can’t pull it off properly, neither could Geely.
> I don’t understand though, why you would rip on Brilliance
Brilliance should have known how BS6 would score on EuroNCAP, yet they went ahead with BS6′s Euro launch anyway.
If Brilliance didn’t know in advance how BS6 would score on EuroNCAP, then we got a even bigger problem here.
> – they’ve NEVER cloned anything, they have some nice cars
With poor safety. I have seen pics of BS6 sandwiched bewteen Accord and Camry. Accord and Camry looked intact, but BS6 was totalled and crashed like a beer can.
> NO car company would nowadays – chinese, japanese, korean, european, it makes no difference – today’s business world and shareholder demands of a quick return on their investment won’t allow a 10 year time frame.
Toyota and Hyundai-Kia are “family controlled” like Ford, the only US automaker that didn’t go bankrupt. These “family controlled” companies have a long-term strategy they follow. The reason Toyota is in trouble that they are in now is because Toyota was being run by a professional manager whose objecive was cost-cutting and high profit. Of course CEO Watanabe’s gone from Toyota now, but it’s up to new CEO Toyoda and his family to clean up the mess of Watanabe’s legacy at Toyota.
> but it’s going to need to be a great car, well marketed and promoted, AND it needs to fill a need in the consumers mind
Which takes a decade and tens of billions of dollars. Something that Chinese automakers don’t have.
> I think some of the new EV/hybrid cars we’re seeing in China could do that nicely.
WSJ already trashed BYD E6. If BYD E6, the most revolutionary car out of China, can’t avoid getting trashed by western press, then none of others will.
> EV’s WILL be hot items in 5 years or so
Yea, Japanese and Korean EVs, not necessarily Chinese EVs.
> That’s too many for a company of Geely’s size.
Not really, those are all concepts. They will probably release 2-3 new models a year max.
> Brilliance should have known how BS6 would score on EuroNCAP, yet they went ahead with BS6’s Euro launch anyway.
One of the most stupid decisions made by a Chinese automaker. The BS6′s crash test will remain deeply ingrained in people’s minds as the epitome of the unsafe Chinese car.
> Toyota and Hyundai-Kia are “family controlled” like Ford, the only US automaker that didn’t go bankrupt.
Ford basically mortgaged EVERYTHING to stay afloat. They were in no better shape (financially) than GM. If GM went trough Ch. 7 and destroyed the supply chain, Ford would’ve gone down as well.
> Which takes a decade and tens of billions of dollars. Something that Chinese automakers don’t have.
That’s why consolidation is necessary.
> WSJ already trashed BYD E6. If BYD E6, the most revolutionary car out of China, can’t avoid getting trashed by western press, then none of others will.
The e6, like the Chevy Volt, is a hype machine. The biggest problem with EV’s in China is the lack of an infrastructure to support them. And also they are too expensive, I don’t see the Chinese consumer willing to pay the price premium for an electric.
You “only” rip BYD, Brilliance, and Chery. Are we supposed to than you for that?!! You don’t deserve to rip ANYONE, all the manufacturers are working hard, SAIC is not the only one. I didn’t see Hyundai or Kia get anywhere after (less than) a decade from when the companies first started. Give them the same amount of time it took the Koreans and they will surpass everyone. The Koreans are the lowest on the global market today. But the Chinese will be better by far after 3 to 4 decades.
We saw lots of platform sharing, which we might see with Geely.
Im looking forward to buying an affordable Chinese made XC90 from the proposed Beijing factory in two years time.
Thanks for your comments JoninChina. I have always enjoyed your thoughtful observations and insights, backed up by real world experience.
It’s funny because, despite the atrocious name, I enjoy IHC’s
knowledgeable commentary as well. But in this case IHC, my first post above was intended to address the issue of the global management problem Geely now faces. My intent was not to put down Hyundae or anyone else. I hope Geely can learn by the experience of others the same way that Hyundae so aptly did.
@ dragin
I will summarize the content of ongoing dispute as follows.
Chinese Nationalists : Chinese auto industry will soon follow the footsteps of Japanese and Korean auto industries in conquering the world, only 10 times bigger because China’s 10 times bigger than Japan. Just wait and see and those American and European drivers will fall in love with cheap Chinese brand cars. Just wait and see, and this is all happening in 10 years, a BYD in every American home’s garage.
Foreign Critics : You cannot infer that Chinese would repeat the export success of Japanese and Korean auto industries, because conditions are very different. Korean auto industry of the 80s did look like Japanese auto industry of the 60s, but Chinese auto industry of 10s doesn’t look like Korean auto industry of 90s and Japanese auto industry of 70s; it actually looks like American auto industry of 20s, and Chinese domestic auto market looks a lot like American auto market, not Japanese and Korean domestic auto markets. Unlike Japanese and Korean auto makers who must sell 75~80% of their output overseas to survive, China is the biggest auto market in the world, and Chinese auto makers could make more money staying home and selling to Chinese consumers than wasting tens of billions to build export models which will be rejected by American and European consumers satisfied with existing German/Japanese/Korean/American brands.
LOL, that’s definitely not it.
I don’t think China is really following Japan and Korea’s footsteps because they are so different. I just occasionally point out that the Japanese and Koreans did their fair share of cloning and copying when people bash China for copied designs.
I personally think the whole JV requirement thing was a mistake that is already hindering the development of China’s auto industry. Instead of doing that, they should’ve just bought some old platforms to get started. But I don’t think this is irreversible.
A bigger problem for China right now is the existence of so many automakers. They need to consolidate. Once that happens, they will have more resources to produce better cars. I am also not quite fond of state-owned enterprises since this can get in the way of fair competition.
You also can’t deny the progress most Chinese brands have made in a really short period of time in regards to safety, design, and quality. It’s happening in a faster pace than it did for the J/K, so why wouldn’t China be able to become competitive in mature markets some time in the future?
@ Analyst
> I don’t think China is really following Japan and Korea’s footsteps because they are so different.
Tell that to Chinese nationalists who hang around here, insisting that China too would become a great automobile export power soon and anyone challenging this notion of “China Supremacy” is a racist bigot.
> I just occasionally point out that the Japanese and Koreans did their fair share of cloning and copying when people bash China for copied designs.
Japan did that before WW2. Japanese automakers in the 60s weren’t exporting clones.
As for Koreans, they did no cloning, they license produced for local consumption.
> I personally think the whole JV requirement thing was a mistake that is already hindering the development of China’s auto industry.
The communists thought that they could outsmart foreigners with this JV requirement. But foreigners turned out to be smarter than the communists anticipated.
> Instead of doing that, they should’ve just bought some old platforms to get started.
Yes. But China’s policy makers didn’t do that.
> But I don’t think this is irreversible.
It is. The foreigners who control Chinese domestic market aren’t going anywhere. To contrary, they are stepping up their assault on Chinese market.
> Once that happens, they will have more resources to produce better cars.
“Better car” is a double-edged sword, because “Better car” cost more to design and build than “Cheap car”. With Chinese automakers competing on price mostly, Having a better but more expensive car than your competitor can be fatal in Chinese auto market.
> I am also not quite fond of state-owned enterprises since this can get in the way of fair competition.
But 99% of China’s automakers are government owned. It’s a lot easier to get rid of a pair of privately-owned car makers(Geely and BYD) than to restructure 100 state-owned car makers.
> so why wouldn’t China be able to become competitive in mature markets some time in the future?
Are Chinese consumers willing to pay more for quality? Japanese and Korean consumers say yes to this question, and this is why more expensive cars sell better over there while cheap cars collect dust at dealership.
Until most expensive cars with highest quality sell the best in China, Chinese brand cars will not be competitive in mature markets.
> Tell that to Chinese nationalists who hang around here, insisting that China too would become a great automobile export power soon and anyone challenging this notion of “China Supremacy” is a racist bigot.
I am fairly nationalistic, but I am also realistic. The problem with bigotry is when people express their opinions in a way that comes off as offensive or just plain dumb. If you are going to say something, say something smart and support your arguments with facts, not biased opinions.
> Japan did that before WW2. Japanese automakers in the 60s weren’t exporting clones.
As for Koreans, they did no cloning, they license produced for local consumption.
Toyota’s first car, the Model AA was a copy of the Chrysler Airflow. Honda’s first car, the S500, was a copy of the MG Midget. These were made after WWII. As for the Koreans, please don’t tell me with a straight face that Kia didn’t have their clones. Even the Forte apes the Civic.
> It is. The foreigners who control Chinese domestic market aren’t going anywhere. To contrary, they are stepping up their assault on Chinese market.
As I said before, the beauty of it is, the Chinese government can do whatever than want, whenever they please. They can and will make life difficult for foreign automakers when they feel Chinese automakers are ready for prime time.
> But 99% of China’s automakers are government owned. It’s a lot easier to get rid of a pair of privately-owned car makers(Geely and BYD) than to restructure 100 state-owned car makers.
At the same time, they can be forced to consolidate with relative ease.
> Until most expensive cars with highest quality sell the best in China, Chinese brand cars will not be competitive in mature markets.
In the end, the direction of the Chinese auto industry will be dictated by where China as a whole (and also the world’s auto industry) goes in the future. For example, should the Chinese market saturate faster than expected due to infrastructure problems, their automakers will have to expand outward.
With rising income and better standards in general, consumers in China will become more savvy too. So what’s going to happen in the future is anybody’s guess. Saying that they will never be able to competitive is pretentious. And what you can’t deny is how far they’ve advanced in a short period of time.
The difference is that China does everything faster, if not differently than everyone else. The Koreans and Japanese took way longer to achieve what Chinese auto manufacturers are achieving today.
Faster doesn’t mean better. Learn to walk before you run.
@ Ed
> The difference is that China does everything faster, if not differently than everyone else.
Well, Chinese better work faster then.
http://www.usatoday.com/money/autos/2010-05-03-sedan-shootout_N.htm
Sonata just beat all Japanese and American sedans to be crowned as the best mid-size sedan you can buy in USA.
This is the second time Sonata beat Japanese sedans in comparative testing in a month, with Car & Driver testing Sonata against Accord and Legacy reaching the same conclusion that Sonata is better than either Japanese sedans.
Hmmm, nice advertisement you pulled there. Saying it’s been “crowned” the best mid-size sedan on the based on USAToday is quite an overstatement. Why don’t you pick a magazine that actually knows about cars? MotorTrend, for example? They crowned the Camry, and the Fusion came second.
I think the Sonata looks nice on paper, and is better looking than the Camry, but its resale value and long term reliability are unknown (I am talking about 10 years, 150,000 miles reliability). I see quite a few earlier 90s Hondas and Toyotas, no Hyundais.
@ Analyst
> Why don’t you pick a magazine that actually knows about cars?
That was actually a joint testing by USA Today, cars.com, and MotorWeek(A weekly TV auto show on PBS). So these guys know what they were doing.
> MotorTrend, for example?
MotorTrend didn’t seem to like the hard suspension setting of Sonata.
> long term reliability are unknown
Consumer Reports say there is nothing to worry about with Hyundai long term reliability. At worst, it’s on par with Lexus according to Consumer Reports data(Lexus is 7th in long term reliability, Hyundai’s 8th).
Can’t we all simply agree that the Camry, Accord, Sonata AND Fusion are all great cars? It’s like comparing a apple to a orange to a peach…..they’re all round, about the same size and they all taste good – which one is the best?
I have a GREAT idea – how about we get back ON TOPIC? The last I looked, this was NOT the “Hyundai fan club” thread, but a thread about Geely.
HH, faster in China does mean better, there is no way they can get anywhere with their cars if they did not improve on quality faster than everyone else. If they were forever improving at the same rate as everyone else, then there wouldn’t be the awe and level of surprise seen at the Beijing Auto Show in 2010.
IHC, I can guarantee you this, no matter how many magazines “crown”(lmao)Korean cars, the Chinese are still faster, so you can spread your jealousy everywhere, but China will overtake Korea in no time.
Faster right now means slower development because they are rushing to put something that looks new out but using old parts and skimping on new design as much as possible to get it to market. A car is not a simple item to produce. SO many parts and without lots of time testing and changing to get the design right it is going to be junk. There isn’t too many ways around that. I do the same with my customers. I refuse to give them new designs for production without a full year of testing. It is too risky for their reputation and our reputation. One bas product destroys a company name so quickly. Look how the world wants to hold on to bad products made in China so badly. Don’t give them a way to have that and only ship good shit. The only way to end the reputation of bad quality products in China. One company can ruin it for many.
How is the world wanting to hold on to bad quality Chinese products? I don’t get what you are trying to say, and what is this one company?
The companies are working hard to develop their own gearboxes, engines, and platforms, and of course they are not going to become world number one in just one night, but my point is that they learn and improve faster than anybody else, which is exactly why they have such huge potential. If one company falls down, it can always get back up (since most of them are very young), and don’t forget there are PLENTY of other automakers in China. Chinese companies do test their products before putting them on the market, on great example is the Chery A3.
What happend to the Volvo in Geely’s hands? Did it become a “Honda/hyundai/toyota/kia” ?