Can China Pull a Japan in The Automotive Marketplace

The global automotive marketplace is not global yet, as the world's most popular nation is still only a bit player. That's about to change, however, and it will take less time and have more of an impact than some realize. The question may not be if China can duplicate Japan's automotive successes, but can they top them?

Population has its benefits – there are more engineering students in China than there are engineers in the United States – but quality is now the auto industry's number one priority. This is where China is playing catch-up, but so far is playing it well.

In the past, China attempted to lure American, European and Japanese design experts to assist in their domestic creations, with mixed results. China has complicated labor laws and restrictions on outside workers, which adds a high premium to flying in foreign assistance. Today, though, more and more top designers are home-grown, and are proving to be just as innovative as anyone else. In fact, not only are they improving on domestic designs, but also putting a fresh spin on stagnant American vehicles.

Take Buick as an example. General Motors is China's most popular automaker and has production and design facilities in Shanghai, with primarily Chinese employees and engineers. LaTely, Buick sales have flourished in China and much of it has to do with a new approach to design. The Chinese Buick Lacrosse is fitted with modern amenities intended to appeal to the country's young, upper-middle class professionals. Internal ambient lighting provides a night-club effect, and there's a greater focus on appealing to the senses (massaging seats being one example).

The Lacrosse's success in China is so substantial it has caused GM to pull a design-180. Instead of outsourcing American schematics to be produced in foreign plants, the Chinese designs are coming stateside. That's right; the next version of Buick's Lacrosse will be large Chinese in origin.

General Motors is not alone. Chrysler Corp. stuck a deal with Chinese manufacturer Chery Automobiles last last year, and is looking to bring some of their subcompact vehicles stateside soon, starting with the appropriately-named A1. The smaller cars are designed, manufactured, and assembled all in China as Chery vehicles, but will sell under the Chrysler or Dodge moniker in the US If successful, look for this partnership to broaden. The A1 should arrive sometime next year.

But China's entry into the United States auto market is not limited to partnerships and outsourcing. At this year's Detroit Auto Show, the presence of Chinese automaker Changfeng Motors provided a lot of buzz and drew a wide spectrum of reactions. In past decades, visits from new import countries such as Korea and Japan were met with speculation and anxiety, but this year's show offered a warmer reception. That's partly because Detroit has been handed a bit of humble pie from those two nations, and partly because China is, well, huge.

Changfeng, China's largest producer of trucks and SUVs, certainly had some unorthodox designs, and some attendees suggested that these vehicles would not cut it in US markets. The same thing was said, though, about Datsun (now Nissan) and Toyota in the early 1980's and Kia and Hyundai a few years later. Once those automakers got a firmer grip on what American drivers looked for and valued, they found (lots of) room in the marketplace. Changfeng – and others like Geely Auto, at the Detroit show the year before – hope to duplicate their successes.

With lower labor costs due to a bottomless pit of human resources, the Chinese auto industry could do more than that. It will take some time, but regarding we're about to see Made in China tags on a whole new product.

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