China Decade From Having Global Carmaker, Bernstein Says

[nruggiero]

China Decade From Having Global Carmaker, Bernstein Says
February 22, 2013
Bloomberg

Chinese automakers are about a decade away from being globally competitive and will have to increase their spending on research and development to close the gap, according to Sanford C. Bernstein & Co.

Carmakers such as General Motors Co. (GM), Volkswagen AG and Toyota Motor Corp. are outspending Chinese brands on research and development and lead in engineering, said Max Warburton, an auto analyst at Bernstein, which has a neutral rating on China’s auto industry. The Chinese have the will and money to make their auto industry world class, he said.

“The Chinese are 80 percent of the way there, 20 percent doesn’t sound very hard, but it’s probably the most complex bits to get right,” Warburton, who is based in Singapore, said in a phone interview yesterday. “They’ll be spending until they make it work and eventually they’ll end up with Chinese carmakers on the world stage.”

Full article available at link.

[FenwickHockey65]

Just got off the phone with HP, who is currently in the process of building a THIRD laptop for me after the first two had inexcusable defects.

Manufacturing location? China.

Decade? Try century.

[oklapike]

I would say this will only give me less reason to ever buy a foreign car, but I had no reason before.

Meanwhile, on a completely different note, the Geely EC7 (one of the no doubt reverse engineered cars cited in the article) seems suspiciously similar to the Chevy Cruze.

[Butz]

I'm surprised it will take them that long. I was expecting it to happen sooner. Gives other makers a chance to prepare I guess.

Just got off the phone with HP, who is currently in the process of building a THIRD laptop for me after the first two had inexcusable defects.

Manufacturing location? China.

Decade? Try century.

HP's fault not China's. My MacBook Pro, Mac mini, iPad and iPhone all assembled in China been trouble free.

[GM-Joe]

I'm surprised it will take them that long. I was expecting it to happen sooner. Gives other makers a chance to prepare I guess.



HP's fault not China's. My MacBook Pro, Mac mini, iPad and iPhone all assembled in China been trouble free.

You must had been lucky, my IPad was a POS; so I have banned Apple products for purchase.

[sfbreh]

You must had been lucky, my IPad was a POS; so I have banned Apple products for purchase.

You must have been unlucky. My iPhone, my Macbook Pro, all 4 iPods I've had, my parents' iPhones and iPads, all of my sister's iPods, and her and her husband's iPhones all work perfectly.

[FenwickHockey65]

Hate my MacBook Pro. Never again.

[Amphibian]

Just got off the phone with HP, who is currently in the process of building a THIRD laptop for me after the first two had inexcusable defects.

Manufacturing location? China.

Decade? Try century.

Don't forget that in, say, the 50s, something being a Japanese product was synonymous with "cheap" not terribly unlike a Chinese product today. It didn't take so long before the Japanese changed that, both in product and the way their items were marketed in order to change the mindsets that Americans and others had.

Depending on China's growth rate, we may not be a decade away (I think it will take longer than that). But it won't be a century either (which I think you may have meant for exaggeration, but I digress).

[tentacles]

Don't forget that in, say, the 50s, something being a Japanese product was synonymous with "cheap" not terribly unlike a Chinese product today. It didn't take so long before the Japanese changed that, both in product and the way their items were marketed in order to change the mindsets that Americans and others had.

Depending on China's growth rate, we may not be a decade away (I think it will take longer than that). But it won't be a century either (which I think you may have meant for exaggeration, but I digress).

In the 1950s Japan was a country that 20 years ago was one of the biggest industrialized powers in the world, with the world's largest battleships, largest aircraft carriers and a navy that went toe to toe with the US for a couple of years. In terms of social cohesion and institutions Japan in the 1950s was decades ahead of China today.

This report is just like all the other US-centric reports on the Chinese car business, in that it gets a few tangential things right but mostly misses the point, and seem to have no understanding of how businesses in third world countries operate.

Maybe one day if there's enough interest amongst the regulars on this board I might do a long-ish write-up on how the Chinese car industry works.

[Butz]

Hate my MacBook Pro. Never again.

You hate your HP too

[FenwickHockey65]

That will depend on whether or not they get it right this time.

That being said, I'd rather wait for that than put up with this stupid POS for the next few years.

[chinamonty]

The Chinese will automate a lot of processes eventually as long as they can still involve people in the chain. they are in business to give their people jobs as well as earn foreign capital.
I would be interested in reading a write-up on the Chinese industry as it has been 4 years since I left. last year I did have a little interaction with its auto component manufacturers though.

[ausrutherford]

Isn't this what they said 5-10 years ago?
Also consider that in around 10 years time, China's population will start decreasing as the lag from the "one child" policy takes affect. How might that hurt the Chinese progress?

[danup]

Just got off the phone with HP, who is currently in the process of building a THIRD laptop for me after the first two had inexcusable defects.

Manufacturing location? China.

Decade? Try century.

On the other hand, an American company was careless and retrograde enough to sell you a piece of garbage under its own name. Which suggests, to me, that there's plenty of room for upstart competitors.

[tentacles]

The Chinese will automate a lot of processes eventually as long as they can still involve people in the chain. they are in business to give their people jobs as well as earn foreign capital.
I would be interested in reading a write-up on the Chinese industry as it has been 4 years since I left. last year I did have a little interaction with its auto component manufacturers though.

The thing that's stopping me is that the car guys here are knowledgeable about cars but maybe not so much the nature of government and institutions. Just as a very basic example everyone here(and everywhere really) constantly harp on about how "the Chinese" are going to do this or that, as if "the Chinese" were just one person with one unifying goal. The people who actually do most of the car making and make most of the money in China, that is SAIC/FAW/Dongfeng, have no interest in exporting anything. Why would they? Meanwhile the only people who do exports are bit players like Geely and Jiangling and Chery, and they are only doing it *because* they have no other choice, and the government are at best indifferent to their efforts and for the most part hostile, since the big players use the government to get preferential access to capital and talent for themselves. It's pretty telling that those are the cars that they chose to buy and dissect, when pretty much every car actually on the roads in China is either a VW or a GM.

Maybe I should stipulate that if you really want to understand how things work you first need to watch all 5 seasons of The Wire and read Why Nations Fail.