Would you buy a Chinese Car?

[East_coast]

Or an Indian Car

Since Ford exited the European luxury brands of cars they all seem to be doing better.

When Geely purchased Volvo one of the first things the new owners did was to change the focus away from tree hugging to challenging BMW, Audi and Mercedes. That change in direction seems to be paying off.

Tata seems to have got the strategy right with it's acquisitions.

How much longer until Chinese domestic brands can really compete on the Global scale?

[ClueMinus]

Probably not this year, but eventually I will, and here's why:

The joint ventures where China allows other countries to use its cheap labor comes with a price: China's engineers are actually taking a front row seat to the technologies of its partners. Each year they spent building cars for other countries will result in a certain amount of knowledge transfer. Eventually they will master the necessary technologies to make world class vehicles.

[bryant.english]

Probably not this year, but eventually I will, and here's why:

The joint ventures where China allows other countries to use its cheap labor comes with a price: China's engineers are actually taking a front row seat to the technologies of its partners. Each year they spent building cars for other countries will result in a certain amount of knowledge transfer. Eventually they will master the necessary technologies to make world class vehicles.

Then they will screw it up by cutting corners on quality at every turn....

[Raccon]

For the time being: absolutely not. Most of the Chinese cars are coffins on wheels, as various crash tests have shown.

[jaykay]

Or an Indian Car

Since Ford exited the European luxury brands of cars they all seem to be doing better.

When Geely purchased Volvo one of the first things the new owners did was to change the focus away from tree hugging to challenging BMW, Audi and Mercedes. That change in direction seems to be paying off.

Tata seems to have got the strategy right with it's acquisitions.

How much longer until Chinese domestic brands can really compete on the Global scale?

20 years.

Volvo, and remember it is only the car division under Chinese ownership, wasn't at the forefront of electronic or mechanical technology at the time of its sale. Only the S40 and S80L is produced in China for the Chinese market only.

Copying automotive technology has gone on for years. Japan, and witness the first airbag. Korea and witness the first Xenons. Technology refused by governments and only allowed a day before domestic manufacturers released the same! I was an automotive design engineer myself at the time and saw it all played out.

Chinese domestic cars now are where the Koreans were in 1995. And that's being generous. Of course there will be more copies, and nothing has been more blatent than the old QQ.

2 areas where China cars will fail at a regulatory level. Safety (occupants and pedestrians) and emissions.

2 areas they will fail at consumer level (outside of emerging economies) design and quality.

[ClueMinus]

Then they will screw it up by cutting corners on quality at every turn....

Not always. At least some of their stuff isn't too bad now: DVD players, mp3 players, wifi routers, clothing, A/C, microwave, furniture, etc. The best part about China is that with their economic growth, their own population is using the Chinese products, thus shortening the cycle of weeding out the bad products from the market.

[imparanoic]

Not always. At least some of their stuff isn't too bad now: DVD players, mp3 players, wifi routers, clothing, A/C, microwave, furniture, etc. The best part about China is that with their economic growth, their own population is using the Chinese products, thus shortening the cycle of weeding out the bad products from the market.

everything is built in china nowadays, but on licence to western or japanese brands,
chinese brands are renowned for quality issues ( lack of), takes time to build on quality and image, only lenovo has relatively ok image and quality ( based that they inherited from ibm), SAIG is probably not too far with old rover designs

they can even compete in hk, noted that 361 ( largest chinese sport brand in china) tried to open a flagship store on cameron, absolutely no one purchased anything, on the basis that prices were 3 to 4 times than mainland prices, only marginally cheaper than renowned brands such as nike and adidas, i gather a year of no business they soon realised why

meizu and zte, haier and miedi are also trying, only time will tell

[ClueMinus]

Merchants in any country will always do their best to cut cost and in the process try their best to get away with things that the market will bear and what the governments will allow, aka cutting corners. As an example of this kind of behavior outside China, for the longest time, despite the number of deaths, car manufacturers in the US would resist the idea of airbags, and the US government would let them, until consumers flocked to foreign models that have them. All of a sudden Detroit didn't find it so difficult to add airbags anymore.

Personally I don't see a manifest destiny of death for any brands based solely on country of origin. Political system used to be a factor as a centrally planned economy without any feedback loop from the market will only result in the destruction of capital, but today's China is capitalism behind the mask of socialism and communism. The dumb ones will continue their downward spiral while the smart ones will adapt and survive.

[East_coast]

361 ( largest chinese sport brand in china) tried to open a flagship store on cameron, absolutely no one purchased anything, on the basis that prices were 3 to 4 times than mainland prices, only marginally cheaper than renowned brands such as nike and adidas,

361 fake sportswear sells for about the same price as fake Nike, Adidas while the real product in the shops seems to be a similar price as Western brands. This shows that the brand has significant value in China and follows the designs and more importantly the business models of successful global sportswear competitors. HK and China do not share the same brand values yet so less likely to succeed here.

As for cars the Mainland brands are again fast followers of Global trends and are probably not too far away from understanding what is needed to differentiate and improve. In some areas such as smart phones (not OS) they may have caught up.



Interestingly (to me anyway) I was having a chat with a CEO of a mainland SME who recently purchased a new phone. On questioning why he had bought a domestic brand he replied that he had owned 3 Apple phones in the past upgrading each time a new one came out. But the 4s wasn't worth the expense so he looked at domestic products running Android that offered more features, better Chinese language support, a lot faster and just as easy to use. He drove a European luxury sports car, had a blingy Swiss watch but was gaining sophistication in what he was purchasing. Not just buying the name but looking at the needs based issues. To him a phone had become a tool not a fashion accessory therefore making a respected local brand just as sensible a purchase. At some point (probably when China feels it can enforce global safety standards and not hurt local brands) the basic family car will also become a practical decision rather than one based purely the coolness of owning a foreign brand. At this point some Chinese car brands will probably compete globally,



Another good article in the Economist is about fast followers Pretty profitable parrots

[ClueMinus]

Good article. In their infancy, Japan's industry also went though this cycle of being the cheap imitators of the world. This was one of the reasons why their products were ridiculed and ignored for years by the then establishment.

As much as we hate it because everybody else does, the fact is most everybody imitates. The original Mac OS imitates Xero, Microsoft imitates the original Mac OS, and then Mac OS X not only imitates Unix, it was build on Unix. In fact, very few companies with a strong Not Invented Here mentality succeed.