Interesting read from forbes
There are over 100 automakers in China compared to only two major American car companies today: General Motors and Ford. Shanghai Automotive is the country’s biggest by revenue: $33.6 billion in 2010. Geely Automotive is another major. It’s best known for the London taxi cabs it produces, and its 2010
Geely builds London's famous cabs.
acquisition of Volvo from Ford.
Still, China’s cars are far from winning the hearts and minds of the locals.
“We asked people about that: whether they would be open to buy a Chinese made luxury car instead of a foreign premium and forty percent said they were open to it,” says Sha Sha. “This is a market that’s five to 10 years away yet. China is very much an open market for the big global auto makers,” she says. “The bar for the locals is very high.”
In the world of passenger cars, China’s auto companies are where the Japanese were in the 1970s, or Korea in the late 1980s. Today, Toyota is the best selling car again in the U.S. It’s Lexus brand is one of the best selling luxury cars in the U.S. Hyundai’s Equus gets compared all the time to Lexus and Mercedes Benz in auto magazines.
“It’s going to take a lot of talent and a lot of really good management to bring China’s car companies on par with Japanese and Korean automakers,” says Kaas. The recent news that the government is saying it will buy cars from China original equipment makers (read: local brands) is a sign that Beijing is pushing for more global players to partner with the locals. GM, for instance, partners with Shanghai Automotive. There, Shanghai Automotive Group can copy a little bit there. Tweak a little bit here, for their home grown models.
“Not all Chinese automakers are going to go after the luxury segment,” says Sha Sha, citing Great Wall Motors as an example. They’ve got SUVs, sedans, pick-ups and minis.
Passenger cars or luxury, China is the powertrain for global auto makers now. They’re the powertrain now because the majors are looking into the future now, and the future for premium and standard passenger vehicles is in China.
“China is impacting investment decisions of these major car companies,” says Kaas. “The country matters a lot for corporate strategy. The industry has finite resources. Where do you want to invest it? Where do you want to focus your advertising?” he asks.
Though he thinks he has the answer: China.
The Norwegian guys post didnt show up in reply....so I didnt know. But I deleted my post already.
