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Discussion Starter · #1 ·
OK gents (and ladies, don't want to be sexist here), you asked..........so here it is. A NEW thread discussing the general state of the chinese car industry now, and where it could be in the next 3-5 years. The previous thread (started by good ol' RIHC a few years ago) had some great info - but was also somewhat incendiary as far as the comments flying back and forth. Let's try and avoid that, shall we? I'll start with a few big questions, and we'll let it fly from there ok?

1) - Where is the industry NOW? Compared to say........2-3 years ago, how has the industry improved? Has it gotten worse in any way? How has market share changed in the last 2-3 years? Which company is standing tall now - and which is faltering?

2) - Where is the industry going to be in 5 years? We all know that the big goal for the chinese car industry is to finally get their "foot in the door" in any (or all) of the "big 3" markets - America, Europe and Japan. In 2008, several of the companies were speaking with much confidence about having their cars in America by 2010.........well, 2010 is less than 2 months away, and I don't see any signs that ANY chinese car will be on sale in America next year. So......how close IS the chinese car industry to REALLY breaking in to one of the "big 3" markets? Which companies might we see growing and prospering - and which companies are destined for failure (or being bought out by a bigger company)? Which company might be the FIRST to really sell their products in America/Europe/Japan? We know that Brilliance is trying to sell in Germany, but it is very limited at this point.

3) Can the chinese car industry REALLY become a world player? Are there any products right now (from any company) that can be considered "world" competitive? Any predictions on HOW the chinese can accomplish this? Personally, I see the alternative energy market (hybrid/electric/hydrogen technology) as the chinese industry's best chance to make their mark - the products being designed and developed in China are MUCH more significant than what we are seeing from America at this time. Japan is doing some interesting things, but I still see China as being the leader right now. The question here for me is - how close are the chinese companies to getting beyond the prototype stage, and actually getting some of these great ideas onto the market and available for the consumer?

I think this is a good start - so let's see what y'all think!!:thumb:
 

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Discussion Starter · #12 ·
JordaanDMC-12 said:
Yes, I actually just saw my first Chinese car ever in person! :) They're test driving them around here in California and all over the country, a DADI motors car.

I know it's going to take a lot of effort for the Chinese to prove their cars for the American market, many people see them as SUPER cheap, too much plastic and unsafe. (Not my views but forwarding what I hear)
Jordaan, I'd like to hear more about this - Dadi is a real small time player here in China, and I'd like to know how they are test driving their vehicles in America before any of the big players are! :eek: Dadi is also not the best example of where the chinese auto industry REALLY is right now, and it's a shame that american consumers might develop their first opinions of the chinese auto industry based on Dadi products! IF only the american consumer could see something more like the Chery A3 5 door, or the Brilliance FRV/FSV, or even the Roewe 550/750 - cars like that would have consumers asking "This is really made in CHINA?? Amazing..."

Alby - I think your evaluation of the industry is pretty much on the money right now! 2-3 years ago, we were all seeing the industry explode with new cars and new showrooms - the world economy was still robust and China had it's eyes on the american market......2010 looked like a tangible goal at that time. Because of the world economic situation, my opinion is that China's auto industry development has been more vertical than horizontal - in other words, the market has matured domestically with company consolidations, more mature model and brand lines being developed, better quality control and a higher level of standard features on all cars (air bags and ABS are standard now with almost all cars built in China, with the exception of the bare basic sub-compacts).......all preparation for horizontal development - in other words, the forward expansion of the international market.

2010 has started off pretty well for the chinese auto industry, with the big news (IMO) being acquisition of foreign companies/technology. Geely buying Volvo, BAC getting most of the Saab technology, even Changan building a licensed version of the previous generation Ford Focus 5 door. Geely is ESPECIALLY big news, because of the ownership of a established international dealer network now.......a HUGE advantage for a chinese auto company wanting to break into the international market. I'm also going to stick with my prediction that the first chinese built cars actually sold in America will be a AMERICAN BRAND. HOW is this possible? Simple - it's quite possible that when GM starts to sell the new Chevy Spark in 2011 in America (the Beat concept car), it will be built in China and exported to America. I ALSO think that cars like the electric Geely Panda, the BYD E6 or maybe even the Brilliance EV are early favorites to reach American shores - why? Less regulations to have to deal with - no emissions testing to worry about!:lol: China's been pushing hard with hybrid/electric technology, and this COULD be a great way to "warm the hearts" of the American consumer to the thought of a chinese car in their garage. Beyond that, it's probably going to be 2012/2013 before chinese cars start to show up in bigger numbers........the economy still needs more time to bounce back AND most chinese cars still need another 1-2 years to be built to american crash test and emissions standards.......not to mention getting a dealer network in place to actually SELL the cars that ARE ready to be exported to America! :cool:
 

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Discussion Starter · #15 ·
Dragin, you make a great point about the electric Panda - I just don't know if Geely is ready to "rock the boat" so much in regards to the Volvo deal. There is a LOT of scrutiny facing Geely right now as to HOW they plan to use Volvo.....leave it alone for awhile? Start raiding the technology cupboards now rather than later? I think it would be a elegant and convenient solution to get customers into the Volvo showrooms, but will Geely get slammed for moving too fast? The E6 is a cool car and COULD be a success - but I don't know if BYD can survive just trying to sell ONE model and nothing else in the showroom. Even Hyundai started off in 1986 with a 3 door and 5 door Excel AND a sport version of the Excel......BYD doesn't really have anything else they can bring to the USA because the rest of their model lineup are clones of other companies vehicles! Brilliance is sooooooooo close to being ready - a good model lineup, no clones and respected for their more "patient" approach.....but financially they aren't capable of doing it right now. The other companies that you mentioned that are already in the USA? Tiny players and I don't really count them in at this point - and probably all of the cars from those companies come to the USA as CKD kits (a different ballgame compared to importing a completely assembled vehicle).

Jordaan......the reaction of the man you asked who was driving the Dadi? THAT is the reaction I was afraid of.........and very damaging for the already fragile image of the chinese car industry in the USA. It would still be great to see some pics though.........so post some when you get the chance!:thumb:

One other thought has entered my mind here.........and potentially this is a big thought - the role of the central government in all of this. Up until now, China's export industry (the holy grail of their economic growth) has made it's mark in the world focusing on more "low tech", less complex products (clothing, toys, home accessories, basic electronics, etc.) - and not too much intervention is needed with those things, other than to help ensure that the products being manufactured pass the laws/regulations of the countries they are being exported to. Most countries in the world have given up on manufacturing these types of products, accepting the fact that it's easier (and cheaper) to import them than to try and make them. Now, automobiles? Another story entirely. The american car (and car industry) has helped to define America's image in the world - cars like the Mustang, Camaro, most any model of Cadillac.....they are just as an indelible image of America as is Porsche/Volkswagen/BMW is for Germany, Ferrari is for Italy and Jaguar/Aston Martin is for England (same goes for Honda/Toyota/Nissan representing Japan). So now China wants to step up to the plate and take a swing at the world market.........but as of now the image of the chinese auto industry isn't very strong. I have no doubts at all that the government is well aware of this - so what will they do about it? Presenting a strong "face" to the world is HUGELY important for China's self-image, and having automobiles capable of playing in the world market is one of the biggest faces you can put out there. They're already doing it to some degree......heavily encouraging (I'm being PC here) smaller companies to liquidate or consolidate with larger companies, and helping to decide which companies are capable of handling the purchase of foreign companies/technology (it took several months before the government finally approved the Geely deal with Volvo). I'm sure the government has other ideas in mind as well.........what else might (or should) they do?
 

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Discussion Starter · #19 ·
Dr. Al, just a great, great posting - thanks. Have patience - China's EV's are coming soon! Within 2 years, I think you'll see at least the BYD E6 and Geely's electric Panda on american soil, and possibly the Brilliance EV as well (this is still in concept stage, but it looks close to production ready if you ask me). You're right about China having a great opportunity here to take the world lead with hybrid/EV/hydrogen technology, I hope they don't squander the chance. China also has a bunch of micro/sub-compact cars that could do well on american roads (larger than Japan's kei cars but smaller than anything in the USA right now with the exception of the Smart car), but those damned annoying american crash test standards keep getting in the way!:lol: The first big step has finally been taken with Geely now owning Volvo (and it's established dealer network), and opens the door for Geely to sell the electric Panda (or anything else they want to sell for that matter) in the USA once crash tests are passed - emissions testing is irrelevant for this car! The GOOD news is that the Panda already received a 4 star rating for crash tests in China.....passing the american crash tests shouldn't be that hard at this point. I think China's investment in hybrid and alternative energy technologies is about to pay off in the next 2-3 years - I think we'll see a whole slew of new models available from almost all of the major manufacturers. At that point, the best of them could be exported to the USA or anywhere else...........besides, at this time what does any american manufacturer have ready to sell on the market, with the exception of the Chevy Volt (and the Volt is a hybrid)?? I don't see ANY pure electric models coming from any american manufacturer for at least 5 years, if not longer - so I'd say chinese car companies have about 5 years to get themselves established with electric/hybrid cars in America (or even some kick butt little sub-compacts with amazing gas mileage). If we follow your theoretical model as far as sub-compacts being the hot new market trend for the future, which cars could potentially represent China? A few possibilities:

1) - Geely Panda
2) - JAC A0 (no, it is NOT a Aygo clone....similar but no clone)
3) - Changan CV5 (the Ben Ben Mini)
4) - New Chevy Spark (the Beat concept, it will be made in China)
5) - Chery A1

I chose these specific cars for several reasons - first, they are legally "safe" (in other words no copyright infringements to worry about), they all have small engines under 1.3l (the Geely offers both 1.0 and 1.3l engines with the Panda) with the exception of the A1. I chose the A1 because Chery has developed a hybrid version of it (WHY they don't sell it yet I don't know)...and it gets 60+ miles per gallon - think american consumers might be interested in that? The Spark is the great anomaly of the bunch........this is my personal pick to the be FIRST "made in China" car to be sold in America - as a AMERICAN branded car (you have the love the irony in this!!).

Dr. Al, one correction of your facts...........the Acura Legend was not a luxury version of the Accord. The Legend was designed in 1985 to be Honda's flagship luxury model, sold under the Acura badge in America but known as the Honda Legend in Japan and other parts of the world. There was a 2 door and 4 door version, it was a GREAT car. I was the proud owner of a 1988 Acura Integra LS (5 door version) for many years (270,000 miles on the odo before I sold it), without a doubt the one of the best cars I've ever owned in my life.
 

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Discussion Starter · #21 ·
Dr. Al, it is obvious that you have some real significant experience in the auto industry, and it's great to have you commenting on the forum - I know I'm learning things and I'm sure other people are too. Question for you - do you have any idea WHAT new ICE sub-compacts the american companies are developing right now? I know about the Chevy Beat (it will be the 2nd generation Spark), but beyond that.........what else? Chrysler is hooked up with Fiat now, so I assume America will see the Fiat 500 soon (which is great, it's a cool little car). Beyond that, I don't know about anything else. Maybe the Ford Ka? I REALLY think that american manufacturers have shown little social responsibility by literally refusing to sell sub-compacts in America....I know, I know - razor-thin profit margins for those cars. However, here is the ultimate sad fact - the smallest car right now that is sold by a american manufacturer is the Chevy Aveo, and the engine size is 1.6l. That is the SMALLEST car available with a american brand name on it????? Absolutely disgusting that the american consumer doesn't even have a CHOICE when it comes to american made small cars, and it's really no surprise they (Ford/Chrysler/GM) are have so many major problems right now. It's no wonder that the japanese/korean manufacturers have stepped in to fill that void so well, but even they have gotten oversized and bloated. Anyone want to guess now how many cars are available now in America with a engine size below 1.5l - from ANY manufacturer (foreign or domestic)? The answer..........ONE - the Smart Car. Honda Fit? Hyundai Accent? Toyota Yaris? Nissan Versa? All 1.5l engines and above - american consumers don't get the smaller engine choices we get in China (like the 1.3l Fit, the 1.4l Accent or the 1.2l Yaris). WHY???? A 1.3l engine can handle highway speeds just fine and has plenty of power for the city (so does a 1.0l for that matter if you're not worried about being a speed demon)....what this REALLY comes down to is the american cultural and sociological attitude of "biggest, fastest, highest, loudest, etc...". Most americans are so used to "keeping up with the joneses" that they're never happy with all the things and comforts they ALREADY HAVE. Who wants to choose the option of a smaller engine when they can afford the bigger one? THAT is the central issue, and until the american culture gets used to downsizing and conserving (or gas reaches $6-7.00 a gallon, which will happen before americans downsize much), tiny ICE sub-compacts will have a tough hill to climb in regards to american sales.

WITH all of this in mind, I still think that chinese manufacturers could still be successful with ICE sub-compacts - but how?? Simple - start modest, and use Honda as a example. In 1971, Honda started it's auto legacy in America with all of ONE car to sell - the Honda 600. They didn't try to sell nationwide at first, they just focused on the major urban areas (NYC, Los Angeles, the Bay Area) on the coasts - places where a small, nimble little car would fit in well. It didn't sell all that well, but Honda stuck with it and introduced the Civic in 1973 - a little bigger engine and a little more room. The rest, shall we say, is history. China can apply this same basic model when it comes to introducing EV's (and sub-compact ICE cars) here - focus on urban areas (where a EV can be a viable alternative for a commute car), keep it affordable and let brand awareness develop in a organic fashion - it WILL develop if the product is of good enough quality. Those last 3 words - "good enough quality" - is China ready for this when it comes to cars? Not yet, but close..........will they will be ready before that window of opportunity closes in America? I THINK they will, but they need to move faster before that window closes.
 
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