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Discussion Starter · #1 ·
Seems like a lot of people do not understand the core essentials of my arguement, so I put up this nice summary.

1. Chinese auto industry is not ready to hit developed markets as of today.
2. Chinese auto industry won't become a significant factor in developed markets for another 10 years.(That's 2016)
3. There is a room for only two Chinese global players. One is SAIC. The other is expected to be FAW.
4. Chery and Geely will hit a growth wall soon as they lack the capital necessary to become truely global players.
5. Chinese auto industry will go through a major consolidation, leaving only a handful of Chinese owned companies. The rest will perish.
6. Chinese auto export will not exceed 2 million/year maximum annually. Any more will cause a trade war with the US and EU.
7. Chinese auto market resembles the US(weak domestic producers and strong foreign producers. A large domestic market) more than Japan(strong domestic producers and weak foreign importers. A small domestic market).
 

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Discussion Starter · #3 ·
Thats a nice list and a sensible one but history suggests that you should not ignore the smaller players - look at the history of Honda for example.
I don't see quality of Honda in any of China's newcomers, a company run by a madman obsessed with engineering. Honda was a "one of a kind" case unlikely to be ever repeated.

There is room for one or two of the smaller companies to also become global players, maybe GWM and Nanjing for example. GWM although small is already a significant exporter and Nanjing already exports to and has a factory in Europe.
The fact is that only those with billions in the bank can afford to outspend and rise above competition. The car market in a developing country always repeats the same pattern. One company has slightly more cash than the others, so it outspends the competition to bring out better cars at cheaper price, driving out the competition in the process and becoming a monopoly. Much the same way GM once monopolized the US market in the 50s, ditto for Toyota and Hyundai too.
 

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Discussion Starter · #7 ·
they say 2008 for a reason
Chinese are not coming in 2008. Don't expect one until 2010 model year at the earliest, and those will sell poorly and be made a joke of late night talk shows.

And bill gates started out fixing computers in his garage.
No he didn't.

well hater you see capital goes out to make the car, and more capital comes back in from selling the damn cars.
Yea, $50 per car according to reports. Honda makes more money selling single Accord than 60 Cherys sold. This is why Chery can't really compete; they don't have a cash cow.

and where is this growth wall think your talking about, you mean the 1.3 billion people in china? or the other 5.8 billion around the world??
Just Chinese domestic market. Developed markets aren't growing and the other hot growing economy, India, is fairly protectionist about its own market.

a trade war would cause more damage in euro and us rather than china.
Americans and Europeans are doing fine without Chinese cars. I don't see why they would suddenly suffer when Chinese cars are banned in those markets.

how would you like to buy a t shirt not made in china for $50.00, or maby a keyboard not made in china for $450.00, or how about a iPOd not made in china for $2300.
Buy from some other countries, like India, Phillipine, etc. What, you thought only China could produce those T-shirts?

and since china is such a large market this means that all the foreign brands doing buisness in china are getting more and more screwed.
Actually all the major capacity expansion news comes from foreigners, not Chinese. I haven't heard of Chery building a new factory to accomodate their "booming" sales, whereas Japanese and Korean brands are at war to expand their production capacity past 1 million/year.

what the English speaking world thinks about there product.
I don't see too many non-Chinese on this board(Who cares about Chinese cars anyway). It is just me lone non-Chinese Vs an army of Chinese waging a war of words.
 

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Discussion Starter · #15 ·
I don't agree with the 2016 estimate for China to become a player in developed countries I think 2009-2010 sounds more reasonable.
2010 is only one more generation away from current generation of Chinese vehicles. Do you honestly believe that Chinese will make a quantum leap in quality and performance in just one generation? Of course not.

BTW if you think China isn't ready for Western world look at the quality of the Polo Classic (Sedan) that was exported to Australia unsuccessfully.
It was up there with products from Mexico, South Africa etc
That Polo would be considered a German car assembled in China, not a Chinese car.
 

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Discussion Starter · #18 ·
Another reason for its flop might be people were scared of Chinese product.
Something that Chinese posters on this forum don't understand...

From what I've heard here about SAIC building platforms to comply with EU Laws it could happen.
Actually, the company most likely to succeed among Chinese venders doesn't think they would be ready to take on the world for another 8 years. And they are using British and Korean engineered cars, not Chinese engineered cars, to make the initial push.

True, but with Chinese parts its considered part Chinese.
Well, shoppers would be trusting that VW badge, not "Made in China" tag...
 

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Discussion Starter · #20 ·
Now, in 2006 (April, to be exact) - no more wood trim, A MUCH better interior with MUCH better fit and finish (nice neutral colors, comfortable seats, much better ergonomics all around), a MUCH better engine (same 1.0, but with DOHC and MPI - more power, better gas mileage) and in general a MUCH better car...........in TWO AND A HALF YEARS.
Still not up to 2000's standard.

Now, to be fair about things..............the current generation of chinese cars are STILL not up to the level of what is needed to be competitive in most foreign developed markets (especially the USA).
By your own admission Chinese cars are not competitive in developed markets. Thank you for proving my points.

HOWEVER, based on the level of progress and improvement they are achieving in a VERY short period of time, 2009-2010 is NOT a unrealistic goal for them as far as marketing a product that CAN be competitive in the USA.
Why do you think Toyota and Hyundai of 2010 will be same as Toyota and Hyundai of 2006? The major players are moving targets; very fast ones to hit indeed.

(I refer again to Hyundai in 1986 - the Excel was NOT a great car, but the VERY attractive price allowed it to set a sales record for first year models that has yet to be equaled).
Hyundai Excel was essentially a fully up to date Mitsubishi econobox sold at a big discount. The car was up to date engineering wise; what it didn't have was quality of Japanese.

Japanese smarted from this lesson and something like this won't ever be repeated.

I am being REALISTIC...........something you might consider trying sometime, China hater
I am the one being realistic; you are not.
 

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Discussion Starter · #22 ·
You took ONE SENTENCE of my previous post, twisted it and took it out of context and made it sound like I am supporting you.........
Well, those were your own words. I didn't make up those, I simply cut and pasted what you said.

NO ONE HERE on this forum disputes the fact that chinese autos are NOT the equal of western autos..............yet.
And they won't be equal for another 20 years. Chinese might have something that's actually marketable in 10 years, and come 95% of industry leaders in 20 years. In the mean time, western buyers will be laughing at the first batch of Chinese cars arriving at port in 2010.
 

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Discussion Starter · #26 ·
Yes, western buyers WILL be laughing.............laughing with JOY when they realize that chinese cars will be able to offer almost ALL of the performance, comfort AND reliability of their western counterparts - for a CONSIDERABLY lower price!
I think you stayed in China for too long and has lost your senses. I have seen this problem among people who returned from Japan, but never seen this from someone returning from China.
 

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Discussion Starter · #32 ·
Even though SAIC are using Korean and British engineered platforms as starting point they will/would be heavilly modified to meet EU Rules and Regulations.
So in a way the Chinese have modified these platforms enough to wear a Made/Engineered in China badge.
??? Rover75 came from UK and Ssangyong has been selling its SUVs to EU market for ages. Of course both are already EU regulation compliant.
 

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Discussion Starter · #38 ·
However SAIC needs to do some work on emission since the K-series is only EURO-III compliant.
Which is a diffcult task.

Note that Lotus Elise, a car originally powered by Rover K-series, swapped the engine with a Toyota engine to make it to the US market.
 

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Discussion Starter · #43 ·
I believe it was Giorgetto Giugiaro who said"It took Japan 40 years to become a great automotive nation. It took South Korea 20 years. I think it will take China as little as 10 to 15 years."
He is wrong.

Japan : Modern Japanese auto industry began in the late 40s, then became the world player by mid 70s, thanks to two oil shocks. That's a period of roughly 28 years.
Korea : Modern Korean auto industry began in the mid 70s, then became the world player by early 2000s. That's another period of 28 years.
China : Modern Chinese auto industry began in the mid 90s. By above calculations, Chinese still have 18 more years to go before they reach the global player level, selling cars that could go head to head with Japanese and Korean models.
 

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Discussion Starter · #45 ·
There are many variables to take into consideration to that simplistic assumption. Times have changed
And Chinese are going up against Japanese with a very high customer satisfaction, unlike Japanese who went up against Americans selling gas-guzzling junk cars. Customers have no reason to switch to Chinese.

growth for many of these companies is heavily accelerated due to strong sales.
Hyundai broke the new import model sales record, a record unlikely to be ever broken, with 1985 launch of Excel. Then it took Hyundai another 18 years to become a true global player.

Did the Japanese or Korean companies ever experience such phenomenal growth in such a short amount of time?
People were lined up to buy Toyotas during two oil shocks of 1970s. Chinese won't enjoy the record breaking sales that Toyota and Hyundai enjoyed back in the 70s and 80s.
 

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Discussion Starter · #47 ·
Of course he is wrong.
Of course.

Chinese auto industry of 2006 is comparable to Japanese auto industry of 1960, and Korean auto industry of 1983 in terms of product maturity in the world market.

The only difference is that Japanese and Korean markets were well-protected to buy enough time for their domestic makers, whereas Chinese auto market is overrun by foreigners and native Chinese auto industry is going through a rough consolidation, leaving just a handful of survivers from 160 or so auto companies.

Another difference is that Japanese and Korean automakers had to go overseas to survive, whereas Chinese automakers are enjoying a brisk business selling in their home markets, so the export is just an afterthought.
 

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Discussion Starter · #48 ·
Most, if not all, Japanese and Korean auto plants are located by seaside, some with built-in ports, because these factories were geared for exports from the beginning.

On the other hand, most Chinese auto plants are built inland, since these Chinese auto plants were for domestic consumption only. Moving Cherys from Wuhu to a seaport alone would add $600 to the cost of a Chery export.
 
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