Ningbo -- Every day in cities like this one, Chinese factories churn out
waves of exports that flood markets in the United States and Europe: DVD's,
microwave ovens, furniture, washing machines, shoes and more.
So it is no surprise that as China's industrial revolution advances, Western
automakers and their workers have begun to worry seriously that an invasion of
Chinese cars will begin soon.
It turns out it probably will not be so soon after all.
Despite growing anxiety that the Chinese would quickly seek to conquer yet
another important industry, it now looks as if it will be at least another
several years before Chinese automakers start exporting large numbers of cars
they both design and make. They had intended to start selling their own brands
in the United States as soon as 2007 but have pushed off their plans by a couple
of years.
And now, some Chinese auto executives admit, it could be as late as 2020
before they will be ready to take on the world auto market.
That's not to say that the Chinese will not follow in the footsteps of
Japanese automakers, who first sent over chintzy cars that were roundly
criticized, only to set new standards for the industry in later years.
Still, despite China's manufacturing prowess, it is, for now, proving a lot
harder than automakers here anticipated to make cars that appeal to Western
tastes.
While Chinese cars are inexpensive and approaching Western levels of
reliability, Chinese automakers have not yet brought their styling, safety,
emissions and performance standards up to snuff, let alone their skill at
marketing home-grown nameplates around the globe.
In one glaring example last year, a German automobile club tested one of 700
vehicles shipped to Europe by a tiny Chinese manufacturer of sport utilities. It
came up with a result that humiliated the Chinese officials who oversee the
mostly state-owned Chinese car industry: the vehicle, the Landwind New Vision,
got the worst crash rating the club had ever awarded in 20 years of testing.
"Most of the Chinese companies that were preparing for exports have turned
cautious, because this is a very difficult job," said Lawrence Ang, a board
member who oversees international finance at the Geely Group, a large, publicly
traded Chinese automaker.
Chinese subcompact cars from manufacturers like Geely and Lifan have
surprisingly ample headroom, but fall short of Western tastes in other areas.
The exteriors of Chinese cars tend to have simple curves and straight lines that
are easy for factories to stamp out of steel, but look starkly utilitarian by
Western standards. Even names like Geely (pronounced JEE-lee) are unfamiliar.
China's automakers also face rising wages at the same time the country's
currency is gradually appreciating, making Chinese exports more expensive
abroad.
"It is a message for us," said Jiang Lei, the executive vice chairman of the
China Association of Automobile Manufacturers, a government agency that guides
the industry. "We cannot rely on cost alone. We have to improve our technology
and management level."
Any delay, however, is welcome news to Detroit automakers, which already have
been trimming thousands of workers and closing plants as they continue to lose
sales to foreign rivals, especially the Japanese. The extra time to prepare for
the Chinese onslaught could help American automakers protect their turf.
That could help defuse tensions arising from the growing American trade
deficit with China, already running this year at an annual pace of $185 billion,
and still rising.
For all the fears expressed at auto shows from Detroit to Paris in recent
months, China's auto industry does not appear to have any magic formula for
making cars. Like other industries in China, this one is dominated by foreign
joint ventures and subsidiaries of multinationals, which are building cars for
sale in the local market first and plan to export later.
Western anxieties were sparked early this year when Geely surprised auto
executives by displaying a subcompact at the Detroit auto show that it had
designed by itself. Target dates for exporting, as early as next year, were
buzzing around. Meanwhile, Chery Automobile, a rival of Geely, announced that
it, too, was planning to export a fully Chinese-made car next year to the United
States.
