Soon in Europe the new Roewe 750. Reason to be afraid?

di Emmanuelle Boudet


China is the 3rd largest car maker and the 2nd consumer in the world. Since China entered the WTO (5 years ago), the Chinese automotive market is hugely growing. Do we have to be afraid? The Chinese automotive production has doubled in four years. The foreign investment, joint venture and different kind of agreement contributed to this growth. The biggest worldwide automobile producers don’t stop to talk about China and all of them have their associate or at least whish to have it. In addition, we can see that the Chinese n°1 car makers are foreign company like General Motor or Volkswagen. 25.69% of the production world leader Toyota is “made in China”. Moreover, this development is available also for trucks. FAW leader on the national Chinese automobile market is also n°1 in the world for truck’s production. So we can understand why big companies like Benz or Isuzu would like to be associated with FAW.
The automobile consumer’s desire of personal car is always growing. The affluence during the last Shanghai automobile show broke the record, more than 500 000 visitors on 7 days. China forecast an output around 9 million units this year (7.3 million units in 2006). From here on the end of 2010, the total output capability could reach 20 million. It means the double of the real demand. Here from on 2020, the economist forecast the automobile industry will surpass the Chinese GNP in development terms.
However, even if the Chinese industry is growing, it is not without defect. Indeed, the counterfeit automobile parts, the widespread industrial espionage and the lack of protection for intellectual property are recurring problem for which the Chinese government pretends to have few way of action.
The incomprehension from some of the Chinese manufacturers in respect to the foreigner’s society’s expectation and the lack of knowledge concerning the international quality norms can stand in the way of the business. Chinese quality products are a current topic, and seem to be reconsidered. Chinese car makers are doing a lot of effort concerning quality. Whether we compare the Chinese’s increase to the Japanese one, China realized in 4 years what Japan did in 40 years! Even China is still far from reaching the Japanese technology level, it won’t be so slow. In fact, the vehicle made in China by the foreigner company use 80% of Chinese parts against 40% the two last years. Can China be competitive with the biggest world carmakers? Brilliance Jinbei Automotive, one of the biggest Chinese automotive manufacturer is going to introduce in Europe by Germany his new « Zhonghua », Geely plans to produce 650 000 vehicles this year and to export two-thirds, in particular in USA. Others brands like Chery, Roewe will be present in the European market soon. Regarding Landwind, it already sells his 4×4 in Europe even if it failed to the “crash test” and really has some strange similarities with the Opel Frontera…
Chinese automotive industry is the pillar government industry. The government offers a financial system help to research and development, and many others fields, include exportation.
Nevertheless, this increase is not without environmental consequences. We are waiting for a bigger hybrid vehicles’ growth already proceeded by some constructors like Dongfeng, FAW, Chery, Changan… This environmental question should be treated until 2010 according to the economical experts.