Discussion: Has China’s automotive industry built a powerful edge or not?
This article in The People’s Daily claims that China has built a powerful competitive edge amongst its international automotive peers, on the one hand it does strike up some truths, on the other hand international companies have been in the business of making cars for 60 to 100 years. What is your take? Please post your comments in the comment box:
Since China joined the WTO 10 years ago, its automotive industry has accomplished its most outstanding and fastest development in its history. A powerful competitive edge in the automotive industry has also been established.
Looking ahead to the next 10 years, it is foreseeable that China’s automotive industry will continue to make even greater progress, said Liu Shijin, associate director of the Development Research Center under the State Council during a press conference for the release of the “China Auto Blue Book 2011″ held on July 5.
Liu said that after China joined the WTO at the end of 2001, China’s automotive industry seized the new opportunities and established a preliminary competitive market environment by using China’s policies of opening up to promote internal openness and innovation of the industry. The competition reduced costs and prices, and expanded the market and consumption.
Then, the expanded market further promoted the economics of scale effect in production. As a result, China’s automotive industry has stepped on a road where production and consumption promote each other and the development is accelerating.
From 2002 to 2010, China’s output of vehicles had increased from nearly 2.1 million to 18 million, making China the largest automobile production and consumption country in the world. In China’s auto industry, Liu believes that the construction of production capacity, the development of related systems, research and development, as well as production management levels and the construction of self-owned brands have all improved much while the output was increasing.
The automotive industry has become a leading industry in China’s national economy and is playing a guiding and supporting role in the overall national economic situation.
Liu noted that China’s automotive industry is still facing many problems and challenges, such as energy consumption, environmental pollution, traffic security and urban traffic congestion. Among all the problems facing the automotive industry, the most challenging is how to properly handle the relations among the government, automakers and the market.
The Department of Industrial Economics under the Development Research Center of the State Council, the Society of Automotive Engineers of China and Volkswagen’s China operations jointly compiled the 2011 blue paper. This is the fourth in a series of annual reports on China’s automotive industry, the first of which was released in 2008.
Based on a large amount of detailed and authoritative statistics and extensive market research, this blue paper provides a comprehensive account of the development, achievements, and experiences of China’s automotive industry in the past 10 years since the country’s accession to the WTO and offers predictions of the future of China’s automotive industry in the next decade through analysis of the domestic and international market situation.
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However, Why would the WTO appeals court try and justify the worlds biggest non market economy and its centralized planning entity the SASAC as a not a non market enity. When they where the one’s who have centralized the worlds jobs and taxes along with 97% of the worlds resources to their non market activities. Specifically due to pin point placement of WTO and World Bank economic leadership of their MSS espionage agents. Which the MSS is now expanding their bases and trying to seek more espionage seats.
Rider I
http://rideriantieconomicwarfaretrisiii.blogspot.com/
I read this comment twice – Im not sure what you are trying to say. Are you implying that China is stealing the world’s resources for their own benefit in defiance of WTO rules?
A powerful edge? What powerful edge?
What Chinese-engineered cars could compete against models from VW, GM, Ford, Toyota, Hyundai/Kia, Honda, and so on?
Not a single one!!!!(Don’t mention MG, because it sells like crap in UK)
People’s Daily should defer this kind of propaganda until there is a Chinese brand model that sells at least 10K a year(10K is not a lot, but at least you can say such model is sellable in the US and EU) in the US or EU. Then we shall talk again.
Read the text. It’s not trying to say Chinese brands have an edge over European and Japanese brands.
@ Analyst
It’s not just brand power, but all aspect of Chinese auto industry. Chinese cars do not have the quality, durability, safety, and design of foreign brand cars, and the gap is not closing.
Yes it is, albeit very slowly. I actually have data to back that up, BTW. I’ll publish that in a series of articles in the near future.
Sorry, just have to do this –
“The Roewe 350 is the world’s first Android automobile.”
Quote from Blake Stimac, Intomobile.com reporter
Here’s the link as well –
http://www.intomobile.com/2010/03/19/first-android-automobile-to-launch-next-month/
Yes, it’s a old article – but relevant in order to prove my point. IHC says that “the gap is not closing” – WTF??????
2000 – Not much of a industry
2003 – Growing, but most cars are a joke
2006 – Quality begins to emerge
2010 – Roewe introduces a world first
The gap is not closing??? I have one suggestion for IHC – delusional behavior is treatable with medication.
@ joinchina
> 2006 – Quality begins to emerge
What quality?
> 2010 – Roewe introduces a world first
There are useful world-firsts and useless world-firsts. This one is a useless world-first.
Quote from IHC –
“Then we shall talk again.”
Oh please, please, please, PLEASE China – don’t start exporting cars TOO fast………..and maybe we can have a peaceful forum here WITHOUT the “idiot hurling crap” everywhere!!
While on a trip to Columbia, I had a chance to see the GWM Hover SUV, and I rode in the Wingle5 pickup. Both are priced well for sale in that market, and seemed to be decent vehicles. However, this is my only first-hand experience with Chinese vehicles, so I’m clearly no expert.
In the future, I would like to see home grown Chinese brands come to prominence. At the turn of the century, there was a good deal of fear, throughout the auto industry, concerning the rise of Chinese competition.
Even with China’s measurable progress, today, that fear is gone because the JVs are seen as the leaders in China’s growth, not the Chinese brands. I understand the fact that government policy has an influence of this, but the time has come for Chinese brands to step up and compete on their own. We can see the beginnings of that trend now, but the trend needs to become a wave, fostered and supported by government policy. The JVs have run their course. They have helped to develop the necessary infrastructure. Now, I hope that the next phase will be the expansion of the real indigenous auto industry.
The cars technology is definitely there in most cases for cars priced 80,000rmb and rising, however the branding is not. Most Western manufacturers are selling a life style, Chinese manufacturers are selling a transportation tool. Branding in the local markets are a major issue for Chinese manufacturers, especially as they stop, start, or kill various brands or swap models or model names at will or if a new CEO comes into town and intends to push forward his vision for the group until he inevitably quits for a rivals operations. Chinese companies are inconsistent with their messaging, PR and marketing, this is delaying the rise of multinational B2C focused Chinese companies.
I would rather say no. They have not even consolidated their home market yet. All in all they still have a long way to go. Maybe Geely, BYD and SAIC are going to make a difference…
The focus should be on: Passive saftey, fuel economy, quality, durability, after sales, price/performance ratio, configurability and maybe design.
Perhaps this is important, perhaps not………I’m watching CCTV news (the international version in english), and up comes a commercial for JAC motors – IN ENGLISH. I’m sitting there dumbfounded for a minutes as I realize this is the first english commerical from a chinese car company I’ve ever seen – a big moment in my opinion because I’m watching this commercial in China! Now, I know that a number of companies are exporting their cars right now (most notably MG in England), and I’m sure that they have advertisements/commercials for their cars – has anyone out there seen any of these commercials? Are they good? Bad? Laughable? How about in China? Are there any other commercials (in english) for cars from other companies that I’ve not seen? I usually don’t watch CCTV news, I just happened to see it in my hotel room in Shenzhen.
Obviously, this was bound to happen – international commercials for chinese cars. I’m simply curious as to how extensive it is at this point, as well as the overall effectiveness of the commercials. Speak up y’all, let’s hear about it!