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Chery & Geely quality nose dives as they cut cost. Price down, quality down too.

12717 Views 21 Replies 14 Participants Last post by  superidler, 
R
http://www.automotiveworld.com/AEM/content.asp?contentid=56214

China: Price war hits vehicle quality; Geely and Chery singled out
By Automotive World staff writer (SS)

23 November, 2006
Source: Automotive World

According to the 2006 China Automobile Customer Satisfaction Index (CACSI), a price war is affecting the quality of domestically-made cars with 77% of vehicles showing defects during the first six months of ownership, local newspaper China Daily, reports.

The survey, conducted by the China Quality Association, points out that major defects involve tyres, air conditioning and braking systems as well as locks and steering wheels.

It is estimated that for every 100 new cars, there were an average of 338 defects, far higher than last year's 246.

The China Consumers' Association says it received 1,038 complaints in the first nine months of this year, up by 21% from 2005, and during the third quarter, the number was 44% higher compared to the second.

Industry analysts say that in the past few years price cuts have averaged about Yuan 10,000 (US$1,250) annually, forcing VMs to purchase low quality components to lower costs. In addition, shortened product launch cycles are also taking a toll on vehicle quality due to shorter research, development and testing periods.

According to Fan Tianshun, director of the customer affairs office of the China Quality Association, this year alone more than 100 models have been, or will be, launched. Statistics from the China Automobile Industry Association points out that more than 3,000,000 cars were sold in the first 10 months of this year.

On the other hand, this year's customer satisfaction index has improved, albeit by only 0.1% from last year. Cars with prices ranging between Yuan 50,000 (US$6,359) and Yuan 100,000 (US$12,719) registered improvements.

The First Automotive Works-Volkswagen Jetta ranked first and Geely ranked last in the customer satisfaction. The Chery QQ and the Chang'an Alto also attracted negative comments.
The CACSI survey was based on 4,648 participants in 36 cities in 25 provinces. The 16 major domestic brands surveyed accounted for 72% of all cars sold in China in 2005.
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C
Is there a product anywhere in the world that doesn't attract criticisms ?

Is there similar stats for American/European/Japanese car manufacturers?

One note, seeing as the Jetta is quite possibly the most widespread car in China, its no wonder it got the highest number of complaints, same for QQ's - they seem to be EVERYWHERE up and down the east of China.
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R
Is there similar stats for American/European/Japanese car manufacturers?
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Cars sold in the US average 110~160. German cars easily exceed that and are considered lemons in the US market.

One note, seeing as the Jetta is quite possibly the most widespread car in China, its no wonder it got the highest number of complaints
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No, Jetta received fewest complaints per 100 cars.

, same for QQ's - they seem to be EVERYWHERE up and down the east of China.
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And receiving the highest number of complaints per 100 cars.
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Real_I_Hate_China said:
Cars sold in the US average 110~160. German cars easily exceed that and are considered lemons in the US market.
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Uhh, no.



Different surveys will give different results, so I wouldn't make any direct comparisons between this and CACSI comparisons. Both surveys are based around the same general idea, though. The thing I'm concerned about is that the Chinese report says the problems are with brakes, tires, and steering. The JD Power survey counts a lot of stuff that does not affect the operation or safety of the vehicle.
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M
Is this where Nanjing's purchase of western technology and employment of Western Engineers and designers will look like a very smart move? Yes.

Really more Chinese companies should go down this route because competion will only intensify from outside China from this point forward. Kia are the best example of what the Chinese automotive sector needs to do. Kia head hunted most of their key positions from either Europe or Japan. Now look at the results....
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R
GM and Ford are doing well as I can see on that chart. Impressive.
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M
renyeo said:
GM and Ford are doing well as I can see on that chart. Impressive.
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GM AND FORD are doing well outside the US, its ironic...
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Real_I_Hate_China said:
Cars sold in the US average 110~160. German cars easily exceed that and are considered lemons in the US market.


No, Jetta received fewest complaints per 100 cars.


And receiving the highest number of complaints per 100 cars.
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Whoops! Apologies Mr. I hate China, replied to you late last night from my time - must have been half asleep and never read your message correctly. :nono:
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dragin
5
long road to quality

High quality standards won't come overnight. But to compete with the big boys a lot of attention to detail is needed. Cost cutting pressures shouldn't result in compromises to quality assurance programs despite the temptation to do so.

Here are some examples of China's domestic car quality issues. Most are minor and cosmetic in nature but they are symptomatic of the below-global-standards now being reported.

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dragin said:
...Here are some examples of China's domestic car quality issues. Most are minor and cosmetic in nature but they are symptomatic of the below-global-standards now being reported.
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With autos, any business, relationships, etc., it is never the big things that make it work or fail, it is always the small things.

Looking at those pictures, most especially the dashboard shot, makes me cringe.....

I don't care if the car runs on water, gets 600MPG, and is only $8k, you can't deliver a car to the USA that looks like that and expect to succeed.
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A
dragin said:
High quality standards won't come overnight. But to compete with the big boys a lot of attention to detail is needed. Cost cutting pressures shouldn't result in compromises to quality assurance programs despite the temptation to do so.

Here are some examples of China's domestic car quality issues. Most are minor and cosmetic in nature but they are symptomatic of the below-global-standards now being reported.
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The Gonow car on the photo's is is really badly put together.
The thing that really is very recognisable is the dash, it's really a sorry sight.
It really looks like a 1 minute rush job.

If they keep on going like this, don't ever try to sell that car in the EU or USA.
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B
I question the source of those pictures... are they from internal quality control or from actual consumers? I fail to see how such glaring defects gets out of the factory, into car dealers, and out of car dealers, into the consumers hands, and then finally got reported...???

Regardless, yes, Chinese car makers absolutely need to get quality, workmanship, and durability right in order to sell, anywhere in the world.
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J
My point.

I can't help but repeat myself.... The Chinese Auto Manufacturing sector needs rapid and decisive Government intervention.

Too much competition is only hurting the Chinese car industry without really benefitting the Chinese consumers. Too many manufacturers is leading to too much being spent on development and fixed costs.

Chinese consumers may be more price sensitive and more willing to compromise on quality than the buyers in the foreign markets, the VMs are drawing big plans for e.g. UK, US, Italy etc. Cost of parts and labour isn't always as cheap as in China and consumer expectations higher.

In my ideal world, initially full-line-up Chinese Auto Manuf (3-6) would jointly (not on every model, at every location, all the time) design and develop 5 types of platforms: Toyota Yaris, Honda Civic, Rover 75, Ssangyong Kyron, Toyota Hiace; 3 engines 1.6L & 2.0L diesels, 1.8L petrol; 2 gearboxes 6spd manual & 6spd auto and have grouped (in pair/threes) dealerships in overseas markets to cut their distribution & marketing costs.
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Jackk said:
I can't help but repeat myself.... The Chinese Auto Manufacturing sector needs rapid and decisive Government intervention.

Too much competition is only hurting the Chinese car industry without really benefitting the Chinese consumers. Too many manufacturers is leading to too much being spent on development and fixed costs.
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I do have a diffrent view.. The competition is not only hurting the industry.
While there is competion, each company will try their best to improve everything for a survival. Simply, merging many companies to one or few would not give them the strength to compete against the foreign company.

If I give you the example, the mobile industry in korea was not well known about decade ago. Then, the competition began within korean domestic market. They released new model every 3 or 6 month. They had to make it slimmer , lighter and smaller to survive. And today... Not many companies are in the business compare to the begining. But the product ,which survived from the competition, worked in oversea as well.

Merging company....might make them bigger and fatter but it won't give them technology can compete.
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B
The argument goes both ways, and some of both is usually the best approach.

When large R&D money is needed - let's say for a state of the art 6 speed automatic transmission - then combining forces amongst several of the small manufacturers is the best (and only) way to go.

I don't advice merging or going at it along. But I strongly suggest corroboration and joint ventures. There are just too many big multi-national dogs out there (ahem Toyota ahem GM)...
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I
Greetings;
We are researching the number of driver side and passenger side airbags installed in Chinese vehicles, every year, between 2000 and 2005, as well as projection for they years 2005 to 2008. Please let us know where we can find these statistics.
Thank you
Maury
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R
Too much competition is only hurting the Chinese car industry without really benefitting the Chinese consumers. Too many manufacturers is leading to too much being spent on development and fixed costs.
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But you can't do anything about it, since all of chinese automakers with the sole exception of Geely are local government owned job programs.

In my ideal world, initially full-line-up Chinese Auto Manuf (3-6) would jointly (not on every model, at every location, all the time) design and develop 5 types of platforms: Toyota Yaris, Honda Civic, Rover 75, Ssangyong Kyron, Toyota Hiace; 3 engines 1.6L & 2.0L diesels, 1.8L petrol; 2 gearboxes 6spd manual & 6spd auto and have grouped (in pair/threes) dealerships in overseas markets to cut their distribution & marketing costs.
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Won't happen. Too many conflicting interests and politics in China.
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dragin
BringIt said:
I question the source of those pictures... are they from internal quality control or from actual consumers? ............ .
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You don't have to go far to find such defect examples. Scan some sales literature, stop in at a dealership, or look around any sales exhibit. Even here in this forum this photo of a damaged Great Wall instrument cluster was posted a while back.

In the beginning all the money is thrown at production and new car sales. It will take some time before any significant amount is directed at product quality and after sales service quality.

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dragin
Wrong Great Wall photo (a Sing), this is the photo that was posted. It's the cluster of the new Wingle pick up.

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micodelija
ok...quality of gelly automobile and qq models,when i was i china i see many vehicles of gelly and chery,most of those models was gelly merie,and uliu,and those models was in pretty good condition,i am sure that people who buy's it have problems,because you can see cheap materials,but those problems are probably something like broken button,wreck tire,or something bizzare stuff,on qq models i see the interior was ok,but the rust??? i see in on almost every vehicle

for great wall,when i was in china i see the all models,those picture of sing is from 2005 year,great wall now have much better dash board,and the quality of plastics is better,also the final when they put that all on the vehicle,now look much better,also on the pegasus model is the same,and so cool pick up

that picture of wingle is my picture from my first visit of company,that was unfinished model,have the stereeing whell from old hover,it was there for testing,on new vehicles from wingle pick up you can see any scraches and poor finish


here is the picture of first ever procuded wingle,and that picuture is tanken from that model,you can see that that models don't have finished bumper,also don't have the rear model,so we can compare the first ever production model and models which are now going out from the company
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