China's Influence in Cars Running Deeper, Wider

If you're anxious already about the growing influence of China in America, brace yourselves for the next decade of cars.

The Wall Street Journal points out Monday how China's role in the development, manufacturing and marketing of cars is deeper and wider than ever. According to the paper, consumer trends now are beginning in the Middle Kingdom and making their way to North America and western Europe, in a reversal of history that shows no sign of abating.

The Journal cites examples from Volkswagen to GM, particularly the deep relationship General Motors has with Chinese consumers and American shoppers under the Buick brand. For a decade, Buick's been the spearhead for GM's growth in China. Now, the Buick brand's essentially being reshaped around the American market first, but with China's needs coming in a strong second.

As TheCarConnection has reported this year, the 2011 Buick Regal will be the clearest example yet of how GM will leverage China in its new, smaller global business. The Regal started life as an Opel Insignia, then was earmarked for the Saturn brand as a new Aura. With the closure of Saturn set for December, Buick's inherited the new Regal by way of China, where the sedan's already being marketed, with a nearly identical appearance to the car that's headed to U.S. showrooms next year.

Another prime example: the 2012 Volkswagen "NMS" sedan, to be built in Chattanooga. As we reported in an exclusive earlier this month, Volkswagen has widened the scope of the Chattanooga plant and its new products, the first of which will be a large four-door sedan that will replace the Passat in American showrooms. What began as a project dedicated to American consumers will now reach other developing markets, including Russia and India--and the sedan itself will share much of its running gear with a new sedan to be built in China, sources to TheCarConnection add.

America isn't the only market that feels the influence of China's growth and maturing industry. The Journal describes the recent Tokyo motor show and the growing presence of Chinese car companies in the Makuhari Messe, while it also points out that Mercedes-Benz--which long held up Japan as a prime destination for its cars--now is focusing styling efforts in China, calling it a "pillar" of the company's global strategy. Watching the Chinese market and tapping into its ethos is leading Mercedes to develop its future electric vehicles there--but it's also helping the company to follow new trends in style, too.

As Mercedes designer Olivier Boulay told the paper, "We want to use China as leverage to push ourselves...just like we did years ago in Japan."

Comments

[bluesky123:]

it is not just cars, it is everything. Today China announces it is spending 3 Billion RMB on investment into small and medium sized companies to boost "their innovation capability, energy saving and emissions reduction".

chinadaily.com.cn/...

ZTE, the 2nd largest Chinese telecom hardware manufacturer announces a 58% rise in Q3 profits. It DOUBLED its share of the global mobile hardware market in the last 1 year.

chinadaily.com.cn/...

China is innovating fast. Their R&D, design capability, consumer spending power and innovative economy are influencing EVERYTHING. The consumers are buying everything - energy, infrastructure, cars, LCD TVs and every single consumer good imaginable. China is going to be much, much bigger than any of us thought and China will pull global growth very powerfully in 2010. This is all happening right now under our noses.

Oct 28 11:24 AM

[Mad Hedge F...:]

mnc Zachary Karabell, president of River Twice Research, is one of the few original thinkers out there who also has a sense of humor. So there’s more than one? Zach has brought his considerable talents to bear on the current state of the Chinese-American relationship in a new book, Superfusion: How China and American became One Economy and Why the World’s Prosperity Depends On It. International trade has fused the two countries into a single economic unit that accounts for a quarter of the world’s population and a third of its GDP, despite wildly different cultures, much like the loose confederation that makes up the European Community. The Middle Kingdom now has reserves of $2.3 trillion, which is overwhelmingly invested in the US. Where else can it go? That enabled them to step up and play an important role in the bail out of the US financial system this year. But it is an imbalanced agglomeration, with Americans over consuming and under saving and the Chinese doing the reverse. This has to stop, lest the symbiotic relationship tears itself apart. The tit for tat, storm in a tea cup, where the US imposed punitive import duties on Chinese tires and the they retaliated with a ban on American chicken feet (yes, they eat them, yuk!), is a recent example. The reality is that old, boring industries that once might have fought tooth and nail for protection are now migrating to China en masse and finding new life. Bet you didn’t know that General Motors sells more cars in China than in the US, some 1.6 million this year? Don’t hold your breath waiting for China to float the Yuan, as it is one of the few tools that give the Mandarins in Beijing direct control of a huge, disparate economy. Chinese military spending is so parsimonious that it won’t remotely comprise a threat to the US. What little they have is directed at potential regional aggressors, like Japan, India, and Russia. The greatest risk to the existing relationship is that Chinese growth continues so rapid, that it pits them against the world in resource bidding wars, which could get ugly. With crude at $82 and copper at $3, has that already started? The book is well worth a read for some excellent “out of the box” analysis. Does anyone have any good recipes for chicken feet?

Oct 28 12:15 PM

[Alphameister:]

Some people seem to think that ingenuity is unique to the American DNA. Creativity will be found wherever men are free. The Chinese economy has the rough spots to be found in any economy new to the free market, but it also has a population willing to work hard and to innovate in search of the rewards that capitalism can bring.

Oct 28 04:06 PM

[NaomiY:]

China is just going through what happened in Japan and South Korea decades ago. I am pretty sure in the next 5-10 years, we will see South Korean brands status will continue its rise and cars China will fill SK's previous spot.

Oct 28 04:19 PM

[rlirph:]

When you refer to Chinese being innovative you must be referring to other Chinese living outside China, not the 1.3 billion Chinese I meet every day in the past three year.

China is a country based on Communism, a country that teaches its citizens to listen and obey. That is why most Chinese listen to their teachers and elders without questioning. The college graduates are knowledgeable and intelligent, but lack independent thinking. Please name one innovation accepted worldwide that China has in the past twenty years.

Remember this country has a culture that is proud in 'copying'. They consider 'stealing' as smart business. In fact if one reads the Chinese law, selling pirated CD and software is only illegal when the retailer has 5000 or more copies in his possession. This is a country where the government condones dishonesty. How else can you explain now the central government has given approval to all the state owned enterprises not to honor their losses in derivatives?

BTW this is not a China bashing comment as I have enjoyed living here in the past and will live here for the foreseeable future. I am speaking as I see it...


- A US Expat Living In GZ

On Oct 28 04:06 PM Alphameister wrote:

> Some people seem to think that ingenuity is unique to the American
> DNA. Creativity will be found wherever men are free. The Chinese
> economy has the rough spots to be found in any economy new to the
> free market, but it also has a population willing to work hard and
> to innovate in search of the rewards that capitalism can bring.

Oct 29 12:30 AM