Chinese dragon flares in car trade with hell-bent agenda

A rampant Government-backed Chinese car industry has big hurdles to overcome before cheap cars are locked behind New Zealand garage doors, NICK CHURCHOUSE reports.
China has leapfrogged Japan to be the world's second largest car market this month with a 25 per cent increase in vehicle sales, according to the Chinese Association of Automobile Manufacturers.
Nearly 80 major international car brands have set up production partnerships in China, and, backed by a fierce energy and determination from within the country, a new threshold of competition has been predicted.
Some commentators have picked China to overtake the United States as the top car market in as little as 10 years. Driven by an economic growth estimated at more than 10%, Chinese vehicle sales rose to 7.2 million last year, while US car and truck sales dipped slightly to 16.5m.
After a Chinese company bought the MG Rover brand, the car company's New Zealand operations manager, Kerry Cheyne, spent a week there visiting a new MG production site and saw an industry with a hell-bent agenda.
"They've knocked up a factory in a year, taken 4500 containers of engine and car building equipment from the UK and managed to get a (manufacturing) line up and running in five months – stripped back, cleaned, painted and going," Cheyne said.
"It's pretty impressive."
The Chinese Government's input was huge as was the economic might behind the fast-growing car industry, he said.
"Money is no object, that was blatantly obvious, it was actually spelt out.
"They have a 50-year plan, they will invest and if they don't make a return for 50 years it's not an issue," he said.
With a rough target of 7m cars produced in 2007, and "phenomenal growth" happening on top of that, Cheyne said the dedication was unparalleled in the Western world.
"They are working from 8am to 10 at night, six days a week, including upper management."
American, Japanese and European manufacturers were reporting sales increases of up to 87% in China, while Rolls-Royce had to boost production to meet demand for its $NZ540,000 luxury Phantom.
China's own vehicle manufacturers exported about 325,000 vehicles in 2006, mostly low-cost trucks and buses bound for Asia, Africa and South America.
But auto market analyst JD Power Automotive Resources Asia director John Bonnell said that export capacity was unlikely to reach into more sophisticated markets in the near future
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