IMO, the big difference isn't really how business is done - business is business is business - a product is designed, manufactured and sold and if the consumer likes that product, the product is successful. That is true in China as well as most other places in the world today. The BIG difference is HOW THE DECISIONS ARE MADE. Let's take one example - cleaner air regulations in America. How many years has various types of legislation gone thru Congress? Even if Congress agrees on something, the state governments stand up and scream (California actually passed tougher standards than the federal government did - which meant car companies had to make a "California only" model)........THEN the lawyers have at it. See where I'm heading here? Sometimes things can take YEARS to get done in America........now let's look at China. Recently the government here decided to provide incentives to consumers to encourage them to buy small cars, by lowering the sales tax on cars with engines with 1.5l or smaller (down to 3% now from 5%) or even lower on engines with engines of 1.0l or less (down to 1% now from 5%). Guess what? It was done - no vetoes, no lobbyists, no media backlash.........it was simply done. Same with alternate energy technology, consolidation of the auto industry by encouraging smaller companies to merge or phase themselves out, etc. - so in this case active government intervention has allowed the industry to move forward more quickly and efficiently. Would this work in other countries (i.e. countries with a different form of government)? Probably not..........but ALSO keep in mind that the chinese auto industry is young, it has grown VERY quickly and was somewhat disorganized (think of the personal computer revolution in the 1980's - lots of small companies starting up to grab a piece of the pie but not much organization in place to make it all work) - it NEEDED (and still needs) direction to get it all "on track". It's hard to believe, but auto companies like Chery and Geely have been around less than TEN YEARS - Brilliance and BYD even less than that. Yet, these are the "big boys" in the homegrown car scene - China is still a young market! There are SO many other things the auto industry is just developing here - aftermarket and accessory shops, the used auto industry (growing BIG TIME here), MUCH more infrastructure (streets/highways/gas stations), repair shops, driving schools, on and on - and this is ALL HAPPENING AT THE SAME TIME. Trust me, there NEEDS to be some government control to keep all of these sub-industries from stepping on each other and NOT disrupting the retail market as well!
My point with all this rambling? Yes, the government here makes some decisions for the industry - things like approval for purchasing foreign companies (like the recent purchase of Volvo by Geely), approving IPO's, things like that. Are there government overseers in the design rooms as they are creating new models? I seriously doubt it. The auto industry is a piece of the economic pie for China - but just a piece. Think of the challenge the government has here - to control the growth and modernization of their entire country in the space of 20 years that took America 100 years to do the same thing. America's infrastructure and economy had time to grow and mature in a more natural way - that's not possible here in China. I still remember seeing my first Geely 6 years ago and just laughed...............and when I saw the new Geely Panda recently I STILL laughed - but in amazement, not pity for what Geely has accomplished in just SIX years. Should we give the government credit for this? No, I give Geely's designers credit - but I cannot ignore the fact that government involvement allowed the auto industry to grow up quicker as well.
