BIZCHINA / Analysis |
Hot auto market creates native competition for detroit(AP)Updated: 2007-04-24 10:21 So far, despite limited exports to Australia and Europe, most of the Chinese auto makers' grand plans for selling to Western markets have not materialized. Chery's earlier plans to sell vehicles in the United States with American entrepreneur Malcolm Bricklin fell through. Nanjing Automobile Co. recently launched production of MG model sports car after buying bankrupt British auto maker MG Rover in 2005, seeking a foothold in Europe. Its plans to build an auto plant in Ardmore, Okla., appear to have foundered amid a cash crunch. "We won't necessarily be building it," company President Yu Jianwei said in a recent interview with National Public Radio. Even in developing markets, it hasn't been all smooth sailing. Geely Group Ltd., China's largest privately owned auto maker, saw its plans for auto assembly plants in Malaysia rebuffed last year. China's domestic auto makers are not ready to meet safety and environmental standards in the United States and Europe, let alone to finance the service and sales networks they'd need to enter those already crowded markets, analysts say. "It's still too early to seriously consider China as a competitive rival to Japan and U.S. in the auto sector," said Zhang Xin, an industry analyst at Guotai Jun'an Securities' Beijing office. "They lack the capability to reach those ambitions," he said. Chinese domestic auto makers still lack the scale and efficiency needed to gain a real competitive edge, says John Bonnell, an analyst with Westlake Village, Calif.-based automotive research firm J.D. Power and Associates. He does believe that some have the government backing and resources to eventually succeed, such as GM- and VW-partner Shanghai Automotive Industry Corp., or SAIC, maker of the Rover-inspired Roewe. One example of their relative readiness was evident at the Detroit show, where the electronics in many of the made-in-China cars on display consisted of pictures of DVD players, navigation systems and stereos - taped to the dashboards.
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