China's Car Makers Ready to Go Global?

[bhchao]

The hybrid market in the US is booming. Maybe that's an area where Chinese automakers might want to consider after they make major improvements on quality first. Right now Japanese brands account for 95% of all hybrids sold in the US, and sales have increased 960% since 2000.

My next car will probably be a hybrid. With gas prices nearing $3 a gallon, and the offering of federal and state tax credits for those who buy one, it's a sensible choice. It is environmentally clean too.

If all else fails, move to New York as a last resort, where you don't have to drive a car.

[Outofin]

Wired magzine had a cover story on Prius.

Rise of the Green Machine

Coincidently or not, it made a long story on China's auto industry as well.

China's Next Cultural Revolution

The magzine is always too optimistic on everything happening in China. It has long seen China as the next great tech power or a tech paradise. Well, probably. But that will be a long long way to go.

Another thing in Wired's newest issue: I saw Huawei's ad. This is the first ad from a Chinese company I see on the magzine, if excluding a IBM's announcement with Lenovo's name in it. Irrelevant to the topic, but since I'm talking about Wired...

[bhchao]

Wow, very informative and interesting article by Wired magazine. Thanks for the link.

"But carmakers have begun to do the math. Right now, there are about 800 million cars in active use. By 2050, as cars become ubiquitous in China and India, it'll be 3.25 billion. That increase represents an enormous sales opportunity for automakers and an almost unimaginable threat to our environment. Quadruple the cars means quadruple the carbon dioxide emissions - unless cleaner, less gas-hungry vehicles become the norm.

Toyota knows China is the future. It will open a Prius manufacturing plant in Chang-chun by the end of the year, and Press believes driving conditions in China make hybrids an ideal fit - if not the Prius, then perhaps a more low-cost, low-power alternative perfect for puttering around megacities (see "China's Next Cultural Revolution," page 106). Or maybe the demand will be for so-called mild hybrids, like Honda's Civic Hybrid, which save fuel and limit emissions but can't run on electricity alone. Such vehicles improve fuel economy by 10 to 25 percent, chiefly by using an electric motor to start the engine. The technology is nowhere near as impressive as the Prius power train, but it's simpler and cheaper - which will be important to Chinese workers making $800 a month...."

Hmm so Bush was not entirely wrong when he said improving existing technologies is a better alternative than signing a global treaty limiting emissions. I have to admit that the Kyoto Protocol is flawed, and the fact that Al Gore (who is a diehard environmentalist, and which makes it harder for him to be objective on both sides of the debate) was its architect proves that signing it is not the real solution in limiting worldwide emissions.

The key is making existing technologies far better, and Toyota is doing that with its Prius. Imagine the majority of China's 1.4 billion population driving cars with traditional combustion engines in 2050. The air in Chinese cities will be much, much worse than it is today. Hopefully traditional combustion engines will be phased out long before then.

[gato]

"But carmakers have begun to do the math. Right now, there are about 800 million cars in active use. By 2050, as cars become ubiquitous in China and India, it'll be 3.25 billion.

A billion cars in China, another billion in India by 2050? That's a little unrealistic.

[39degN]

This is the first ad from a Chinese company I see on the magzine

Huawei actually has a long history of issuing ads on other magazines.

[nelsonharhar]

Oh so early. I thought they would try middle east or north africa first. Chery is gradually building their brand in those areas. But germany is the homeland of volkswagen and BMW. I'm afraid that Jinbei won't do anything but building up a image of low quality. Cheap is not good' date=' but on the other hand, is not bad at all. Low-quality and less safety is another story.

Car, maybe the last and ultimate market Chinese manufactures want. It has become a dream. I know nothing about car-making. Just some years ago, I wondered why we could build a rocket sending a man into the space but could not make a car! But, all of a sudden, a bunch of Chinese companies started churning out cars. What's happening? I though it must be a tremendous job but now it seems so easy.[/quote']

Well to be honest and rather sadly for many patriotic Chinese, the aircraft made to get them to space was heavily based on Russian designs (abeit being relatively new).

Many Chinese cars are mere assemblies and blatant copies of popular models. Rumours has it that the QQ's blueprints were actually brought by the Chery company from a few ex-Daewoo employees (this is a bad new trend the Chinese and Taiwanese are trying to get foreign technology).

Many of the cars being exported to Europe (Germany and the Netherlands for example) are mere variants of popular models with engines and transmissions being old designs from other companies. So in effect, their performances are nothing breathtaking due to older technology, engines emit greater pollution and safety isn't that great. If you have a look at any geuninely 100% original Chinese designs, it's clearly different to that of the exporters who either base their exports on a popular Japanese/Korean/Western model or get their designs done from big design houses from Italy.

The Chinese car technology is something like 20 yrs behind the West and roughly 25 behind Japan. The recent purchase of the MG Rover blueprints for the Rover 75, 25 and K series engines underlines this (note: the 75's engine is from BMW). Whilst the Rover range purchased is considered outdated in most Western countries (75 was designed by BMW in 1998), this is somewhat comparable to a breakthrough technology in cars for China. Put it another way, think of the Microsoft Office packages you use - whilst Office 97 is considered old hat in the US, to China this is like Office 2003 or the next version coming out.

If anything, perhaps it would be wise for the Chinese companies to focus on producing hydrogen or other efficient energy based cars. For one, it's simply far behind in combustion type engine technology as noted, there aren't a lot of petrol stations built yet and thridly even with a low penetration of cars per capita, it's already choking it's lungs.

I suppose the positive thing is that China is out of it's darkest days and at least somewhat learning and imitating the leaders on Earth, advancement in a way. As one article noted - a Japanese CEO at one of the big Japanese car houses basically summed it up saying if we are talking about how far the Chinese will go in producing cars that will transport people from A to B, they'd got a long long way and from a human progress prospective, it would be rather good for mankind. However, if you were talking about competing with the European and Japanese giants, they have a long way to go, maybe 20, 30, 40 even 50 years. He then adds by then cars will likely be mere commidities like computers and that transport would likely transform into some unfathomable thing today, basically saying that the Chinese would take 50 years or so to produce the technology and standards (emissions, safety etc) to meet today's (2005's) standards.

As someone pointed out, quality is a bign hurdle for the Chinese companies and I suppose the Chinese still don't understand the importance of marketing and the power of being perceived as a "legitimate" company (R&D). Until then, we will not see any such sequel to the Japanese and South Korean automotive success stories.