The Chinese Auto Industry
Oct 21, 2005: I just attended an interesting conference last week in Tianjin on the "sustainable" (economic) development of the Chinese Auto industry. The info below is a summary of information Jason and I have compiled on the key insights gained, contacts made, notes from presentations, and other observations from the conference.
A. Insights:
As usual at conferences, we learned both from what was said...and what was not said.
What was said (repeatedly):
1. The success of the industry depends on breakthroughs in vehicle efficiency and quality
2. Safety, efficiency, and environmental effects are very important for the sustainable development of the industry.
2b. Probable fuel pathway : Diesel -> GasToLiquid,BioTL,CoalTL -> Hydrogen
3. China must cultivate their own independent capability to innovate, lest they find themselves in the same situation as the Latin American countries are in now. (more on the L.A. effect in the report).
4. Need to improve the reputation of the China brand. Reputation now= "low-quality".
5. IP. Don't steal IP, respect it. This is key to enabling more technology transfer from the multi-national companies.
6. The importance of the Chinese "Mini-car". They want to develop a chinese-only brand, efficient, affordable vehicle to reach the middle classes. (picture below: road construction, getting ready for the cars to come)
What was not said:
1. Why China has not been yet been successful developing an internationally recognized China-only brand car? Why has both Korea and Japan been able to do it, but China has not? Both Korea and China started around the same time.
2. When the new environmental emission standards will go into effect? A rep from EPA spoke about some new standards, and the crowd had hoped they would give more specifics on when the standards would go into effect.
3. From what we heard from other participants, they were a little disappointed by the lack of concrete facts and information given at the conference. Rather the speakers made a lot of forecasts and general observations, rather than tackling some of the more difficult questions facing the automobile industry (like the ones listed above).
C. Other Observations:
Jason had a chat with an 30 yr veteran employee of Dongfeng Motor. He had some interesting comments about why China has of yet been unsuccessful exporting a China-only brand car and the "slow" development of China’s auto industry. What he pointed out is the lack of innovation due to the failure of technology transfer. China used to exchange its big market with developed countries for their technologies. However, because China didn't respect the IP, foreign partners learn to block the "core technology" to China. At the end, Chinese auto industry still means low-end and labor intensive. Korea respected IP more, and that's why have received more trust (and the know-how) from their foreign partners.
As usual at conferences, we learned both from what was said...and what was not said.
What was said (repeatedly):
1. The success of the industry depends on breakthroughs in vehicle efficiency and quality
2. Safety, efficiency, and environmental effects are very important for the sustainable development of the industry.
2b. Probable fuel pathway : Diesel -> GasToLiquid,BioTL,CoalTL -> Hydrogen
3. China must cultivate their own independent capability to innovate, lest they find themselves in the same situation as the Latin American countries are in now. (more on the L.A. effect in the report).
4. Need to improve the reputation of the China brand. Reputation now= "low-quality".
5. IP. Don't steal IP, respect it. This is key to enabling more technology transfer from the multi-national companies.
6. The importance of the Chinese "Mini-car". They want to develop a chinese-only brand, efficient, affordable vehicle to reach the middle classes. (picture below: road construction, getting ready for the cars to come)
What was not said: 1. Why China has not been yet been successful developing an internationally recognized China-only brand car? Why has both Korea and Japan been able to do it, but China has not? Both Korea and China started around the same time.
2. When the new environmental emission standards will go into effect? A rep from EPA spoke about some new standards, and the crowd had hoped they would give more specifics on when the standards would go into effect.
3. From what we heard from other participants, they were a little disappointed by the lack of concrete facts and information given at the conference. Rather the speakers made a lot of forecasts and general observations, rather than tackling some of the more difficult questions facing the automobile industry (like the ones listed above).
C. Other Observations:
Jason had a chat with an 30 yr veteran employee of Dongfeng Motor. He had some interesting comments about why China has of yet been unsuccessful exporting a China-only brand car and the "slow" development of China’s auto industry. What he pointed out is the lack of innovation due to the failure of technology transfer. China used to exchange its big market with developed countries for their technologies. However, because China didn't respect the IP, foreign partners learn to block the "core technology" to China. At the end, Chinese auto industry still means low-end and labor intensive. Korea respected IP more, and that's why have received more trust (and the know-how) from their foreign partners.
Posted on Friday, October 21, 2005 at 03:23PM
by
Jonathan Xavier Weinert
in Research Progress
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Jonathan Xavier Weinert
in Research Progress
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