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Discussion Starter · #1 ·
http://www.voanews.com/english/2006-09-11-voa17.cfm

xpert Says China Should Stay Out of European, US Car Markets
By Luis Ramirez
Beijing
11 September 2006


China's soaring trade surplus is the source of friction between Beijing and the United States and Europe. But one product the United States and European Union perhaps should not worry about is Chinese cars.

Cars are among the few Chinese-made products that are yet to be visible in markets around the world. China's car makers have for years been trying to make inroads into overseas markets.

China's car manufacturers have sold cars and trucks to smaller markets including Iran, Syria, Egypt, - and to a lesser degree - Colombia, Indonesia, and Vietnam. But the car makers' efforts to penetrate wealthier western markets have been slow.

Experts say Chinese auto makers are being careful not to make the same mistakes a South Korean car maker did when it introduced low-priced, but poor-quality, vehicles to the United States in the 1980's.

John Humphrey is manager of China operations for the U.S.-based car industry consultants J.D. Power Asia Pacific. He said that strategy ruined the reputation of South Korean vehicles and hurt the company's sales - and image - for years.

"The price-only strategy does not work. These folks in China, the Chinese local brands, are studying that," said Humphrey. "And I think they are realizing that that price-only strategy will not work unless the quality of the product gets better. I think that is a primary reason why you are seeing some delay of the launch plans of some of these brands."

Humphrey says Chinese-designed cars are far behind Western models in terms of quality, but he says they are improving quickly as the domestic market grows and competition increases.

Seven-million vehicles are sold in China each year. That means China this year surpassed Japan to become the second-largest car market in the world after the United States, where more than 16-million are sold annually.

At least two Chinese car makers have said they want to export to the United States, but there has been no confirmed date for starting shipments.

In China, the domestic makers have plenty of competition. Many of the top European, Japanese and U.S. car makers have factories in China, turning out millions of cars a year.
Take the advice of experts. Why bother with cut-throat developed market when Chinese domestic market is booming? Stay home and make easy money.
 

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Discussion Starter · #2 ·
http://today.reuters.com/news/artic...ST_0_AUTOS-CHINA-EXPORTS.XML&rpc=66&type=qcna

China car makers should go slow in US -expert
By Lindsay Beck

BEIJING, Sept 11 (Reuters) - Chinese car makers should be wary of exporting to the U.S. and European markets before they are ready, a top automotive consultant said on Monday, warning they would not be able to compete on price alone.

China's domestic car makers have been increasingly pushing for overseas sales to try to maintain their rapid growth, but have yet to make serious inroads into Western markets, which have high volume sales, but low growth compared with Asia.

"Expectations are not homogenous. They differ significantly by market and right now the U.S. market expects a lot more than what Chinese cars are delivering," said John Humphrey, who manages China operations for auto consultants J.D. Power Asia Pacific Inc.

"The U.S. is the most competitive auto market in the world. There are a lot of players in that market and not a lot of growth," Humphrey told reporters.

China became a net vehicle exporter for the first time in 2005, exporting 172,800 units, up 120 percent from the previous year, but most of those exports were to developing countries.

Domestic players Geely Automobile Holdings Ltd (0175.HK: Quote, Profile, Research) and Chery Automobile have both said they wanted to export to the United States, but neither have set firm dates for entering the market. Chery President Yin Tongyao has said he was "scared of drowning in".

But with billions of dollars being invested in China by the likes of Volkswagen AG (VOWG.DE: Quote, Profile, Research) and General Motors Corp. (GM.N: Quote, Profile, Research) as well as local players, some have warned of a looming glut that might force companies to turn to exports to survive.

Companies like SUV maker Great Wall Motor Co Ltd (2333.HK: Quote, Profile, Research) have already started making tentative moves into Europe. But in wealthier markets, Chinese car makers are up against higher emissions standards and more stringent quality controls, and would be faced with building distribution networks from scratch -- the cost of which would eat into their advantage of lower manufacturing and labour costs.

Whereas Chinese consumers cite gas mileage and price as the things they value most when buying a car, U.S. consumers are more likely to value reliability and durability.

That will be a challenge for China's car makers, which Humphrey said have more problems per vehicle than the average.
 

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there are experts on both sides, and they have some valid points, but i still think in due time chinese manf's will prove these international players that they are a major threat
 

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Discussion Starter · #4 ·
i still think in due time chinese manf's will prove these international players that they are a major threat
Well, foreigners controlling Chinese domestic auto market aren't sweating. A foreigner's biggest enemy in China is another foreigner, not Chinese brands.
 

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Real_I_Hate_China said:
Well, foreigners controlling Chinese domestic auto market aren't sweating. A foreigner's biggest enemy in China is another foreigner, not Chinese brands.
Mate, that is one of your most bs laden statements ever. I don't know how much time you spend talking to people who work in foreign car companies in china, but I spend quite a lot of time doing this. They do consider the chinese makers a threat to their business. They recognise that the chinese car offers a mix of price and specification/quality/ whatever you want to call it that has attracted a lot of consumers who would otherwise have bought foreign cars. A couple of years ago chinese brands occupied 5% of the market, now it's about 25%. You think the foreigners wouldn't rather have kept that 20%?

Whether the low price niche will work in US is the subject of the article. But the suggestion is not 'cheap cars won't sell', it's that 'bad cars won't make a successful business however cheap they are'.

This does not mean that a cheaper, but still good quality, car cannot make a successful business. Of course now you're going to tell me that chinese cars are more expensive than foreign cars, and it costs 800 USD to move a car from Wuhu to the port etc etc but I've heard all that before and outside of the internet it is found to be bs.
 

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Discussion Starter · #6 ·
They do consider the chinese makers a threat to their business.
Of course anybody selling car is a potential threat.

They recognise that the chinese car offers a mix of price and specification/quality/ whatever you want to call it that has attracted a lot of consumers who would otherwise have bought foreign cars.
Look at Chery, it is practically a QQ company, its higher priced models aren't selling. What does this mean? People who have money would rather buy foreign brand cars, while only the first time car buyers with limited cash resources are buying Chinese brand discout cars.

Why is this happening? Because Chinese auto market isn't a value oriented market like that of US and Europe. Automobile is still viewed as a social status symbol in China, and this is why car buyers would rather pay more to buy foreign brand cars over Chinese brand, because that extra price also buys you the prestige that doesn't come with Chinese brand.

A couple of years ago chinese brands occupied 5% of the market, now it's about 25%. You think the foreigners wouldn't rather have kept that 20%?
Or how about foreigners not wanting a piece of that unprofitable lower end segment?

Whether the low price niche will work in US is the subject of the article. But the suggestion is not 'cheap cars won't sell', it's that 'bad cars won't make a successful business however cheap they are'.
You can't build a quality car cheaply. Companies like Toyota enjoys an incredible economy of scale and cost-optimization, so it is not possible to buy a component of certain quality at less price than what Toyota pays for.

The only reason Chinese cars are cheap now is because they don't come with stuffs standard on foreign cars, like 6 airbags, ABS, galvanized steel body, California emission exhaust system, etc. Add those and Chery prices start approaching Korean prices in developed markts.
 

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I agree that Chinese cars should stay out of any market until they are truly ready to compete with existing/established competitors.

With that said, the Chinese car companies are learning fast, and sooner or later they'll catch up and be ready for competition. I can't wait.
 

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BringIt said:
I agree that Chinese cars should stay out of any market until they are truly ready to compete with existing/established competitors.

With that said, the Chinese car companies are learning fast, and sooner or later they'll catch up and be ready for competition. I can't wait.
If Chinese cars can meet safety requirements, I'm all for them coming to the US. But I bet reliability problems and quality problems (among other things) will cause Chinese car sales to be very SLOW in the U.S.
 

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Real_I_Hate_China said:
Well, foreigners controlling Chinese domestic auto market aren't sweating. A foreigner's biggest enemy in China is another foreigner, not Chinese brands.
The fast-expanding sales this year have enabled domestic carmakers to increase market share from 20 % by the end of last year to the highest 25.4 % market share compared to joint ventures.
 

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Chery's QQ is only 45% of its car production!

QIRUI (CHERY)

QQ Qiyun A520 Eastar Tiggo V5 Totaal

Prod.Jan.-71.916 57.527 7.792 8.504 12.995 555 159.289
July 2006
c.2006 123.000 99.000 13.500 15.000 22.000 1.400 273.900
2005 115.960 58.491 0 9.543 5.164 0 189.158


Hello mr. Hater from this little statistic you can see that your statement: "Look at Chery, it is practically a QQ company, its higher priced models aren't selling." is as always, Hater: nonsense!
Goodbye!::D
 

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statistics again

QQ: Jan-July: 71.916, for 2006: 123.000, in 2005: 115.960;
Qiyun: Jan-July: 57.527, for 2006: 99.000, in 2005: 58.491;
A520: Jan-July: 7.792, for 2006: 13.500, in 2005: 0;
Eastar: Jan-July: 8.504, for 2006: 15.000, in 2005: 9.543;
Tiggo: Jan-July: 12.995, for 2006: 22.000, in 2005: 5.164;
V5: Jan-July: 555, for 2006: 1.400, in 2005: 0.
Chery in total: Jan- July: 159.289, for 2006: 273.900, in 2005: 189.158.

Hope you can read it better.
 

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Real_I_Hate_China said:
Well, foreigners controlling Chinese domestic auto market aren't sweating. A foreigner's biggest enemy in China is another foreigner, not Chinese brands.
Foreigners controlled 90%+ of market share 10 years ago, only 70% market share. With Chinese governmnet now behind the recent rally of chinese brands with favorable policies and direct investiments, all foreigners are sweating.

What makes foreign car makers so afraid about Chery is not chery itself, it's that Chery is may proving it to all chinese car makers who are doing joint ventures with foreigners that estibilish your own brand is that only sustainable way to grow in long term.
 

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Greatwall autos in Europe...!!!

Yes, in 2005 GWM enter in Italy, they are in Russia and france

N E W S05.12.2005
The First Launch of Great Wall Motor at Italy
In the first half of December (Dec 3rd — 11th ) on the 30th International Automobile Exhibition at Bologna, Italy Great Wall Motor took a great show, which is unprecedented in the history of Chinese auto brand.



It is reported that Bologna auto exhibition is one of the most famous and biggest auto exhibitions in Europe which is held once a year. All the famous brands such as Ferrari, Dam Chrysler, Ford, Cadillac, Porch, Honda and others more than 60 famous car brands take a look. As many as 1,400,000 people attend the exhibition. This time 6 models of Great Wall Motors attend the exhibition including 2WD & 4WD & Super deluxe Hover CUV and 3 models of Pickups covering 2WD & 4WD double cabin & one and half cabin. The cars take the area up to 340 M2 located at one of the best position of the fair.
:D :thumb:
Please enter in: www.gwm.com.cn is oficial all the news
 

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Dodge's rumoured engagement to build Chery-based, Dodge-badged subcompacts in America is good news for the Chinese. First of all, it helps to build brand visibility and awareness for Chery while the managers learn the ropes of operating a car brand the American way for the American market. It was exactly how Toyota began their North American operations through a joint venture with GM in the form of NUMMI in 1984, wasn't it?!

Slow and steady can still win the race - big time.
 

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renyeo said:
Dodge's rumoured engagement to build Chery-based, Dodge-badged subcompacts in America is good news for the Chinese. First of all, it helps to build brand visibility and awareness for Chery while the managers learn the ropes of operating a car brand the American way for the American market. It was exactly how Toyota began their North American operations through a joint venture with GM in the form of NUMMI in 1984, wasn't it?!

Slow and steady can still win the race - big time.
I think Chery's being asked to build these vehicles in China, not in the US.

While Toyota's first full assembly of vehicles in North America was through NUMMI (a joint-venture between GM and Toyota), Toyota started final assembly of pickups on their own before that...and importation of Toyota vehicles started 25 years before NUMMI was founded.
 

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I think the idea is that the "Experts" are telling Chinese companies to get their products up to par, before trying to make it in the US.

Kind of like moving up to the big leagues, you need to have the game to fit in.

Also, it does more harm than good when a new company comes forth with products that are less than desirable. They are already fighting so many obstacles and the most of which is public perception. So they need to really do a lot to counter that.
 
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