China has long since been (in) famous for the fakes that it creates with professional precision. However, after years of backdoor entry, Chinese contribution to the ‘original’ global market has become visible now. And overtly noticeable is its presence in the automobile industry. Recently uprooting Japan from its position as the second largest car manufacturer, car exports from China clocked over 100 per cent increase in 2007.
No matter how unpopular Chinese products may be, they find a good market footing in both the developing and developed countries. Surprisingly, Chinese car makers are also finding a potential market in countries like India and US, which boast of car makers like Tatas, Mahindra & Mahindra and General Motors respectively.
Much of China’s success can be attributed to their laudable quest for innovation and aggressive selling. Furthermore, the Chinese government has been extending enormous support to the automobile industry, providing it with sops and incentives. Compare this to the red tapism and inferior infrastructure of India, and suddenly China’s surge ahead does not seem so astonishing.
According to McKinsey Auto Survey (published in Business World, June 2, 2008), Indians tend to concentrate on the price and image while choosing a car. This could be one of the reasons why it could be possible for Chinese cars to find acceptance in the Indian market. Low cost of labour and less export duty help in reducing the price of the car, this is a big attraction for the Indian buyer. However, doubts remain over the standards of safety and pollution control. Of course, apart from US and Europe, most countries do not have very stringent norms and this could also help the Chinese cars enter the global market. Many analysts have their eye on China’s aggressive move to the African market. This has surprised many because Africa is too poor to be a major market. I guess startup companies of China would like to test their foothold in the smaller markets before conquering the US market. Geely (pronounced Jee-lee) and Chery have been facing a few hiccups in the US but they will soon gain acceptance.
Geely is owned by the local government of Wuhu and has found support by the Shanghai Automotive Industry Company (SAIC). More than its cars (as of now), it is more famous for being sued by GM Daewoo for copying that company’s Chevrolet Spark. They had scouted a number of key Korean engineers who were working for South Korean Daewoo Motors before bankruptcy and who took a complete set of plans with them and went on to create Daewoo vehicles at Chery. (Well, China has been infamous for fakes, hasn’t it?).
Till a few years back, China’s roads would see only scores of bicyclers trudging their way. Now the equation has changed drastically. There had been eight million bicycles then, and now there are 11.5 million privately owned cars. 1, 000 cars are added daily. With exports also showing a great upward trend, it seems China is really going car crazy!
[Image Source: http://www.flickr.com/photos/spike55151/1424007763/]