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JAPAN NEWS AND DISCUSSION

Car industry shakeup opens door to China upstarts

Business Apr. 18, 2009 - 04:12AM JST ( 11 )

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11 Comments

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elbudamexicanoApr. 18, 2009 - 09:39AM JST

Everything is a cycle, the USA,Europe and Japan were once on top of the car industry but soon China and then India will come out with smaller, cheaper cars that many poor folk all around the world need now, and not huge HUMMERS nor other idiotic SUVS!
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KwaabishApr. 19, 2009 - 01:20AM JST

With China's battery technology at its current state, though, you may see a lot of cars on fire on the side of the street, wouldn't you think?
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MikeSatoApr. 19, 2009 - 10:24AM JST

I would be more worried about Sony batteries exploding, given the number of recalls they've had in the past. BYD on the other hand has never had a single recall.
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KwaabishApr. 19, 2009 - 03:29PM JST

A great lot of those batteries, while labelled Sony, were also made in China and Malaysia.
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MikeSatoApr. 19, 2009 - 06:03PM JST

Kwaabish, do you have a source on that info? Most articles I've found -- as you said -- simply point to Sony-labelled batteries, but have never mentioned the country of manufacture.
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KwaabishApr. 20, 2009 - 03:47AM JST

Mine was a Sony battery that was made in China.
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dontpanicApr. 20, 2009 - 11:23PM JST

"BYD on the other hand has never had a single recall"

For many years neither did Japanese manufacturers. The agreement was to issue service orders to dealers and make repairs on the quiet when the car comes in for maintenance. This changed in the mid nineties when the cosy arrangements between the ministry of transport and the manufacturers fell apart.

Dont believe all you read. When people make cars, they cock up. Chinese companies have yet to produce a vehicle with anything like US, European or Japanese standards of build.
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MikeSatoApr. 21, 2009 - 12:41AM JST

"Dont believe all you read. When people make cars, they cock up. Chinese companies have yet to produce a vehicle with anything like US, European or Japanese standards of build."

Yes I agree; however, compared to the US, European, and Japanese auto industries, the Chinese industry is basically in its infancy. Only recently when the Chinese economy became stronger and people could afford cars that Chinese automakers started to become more serious about it. When Japan started out, they weren't the highest quality either. Look at South Korea, they have done an excellent job with the Hyundai brand, yet 10 years ago they weren't even on the radar. Additionally, investors wanting to export Chinese cars to American and European markets will undoubtedly force Chinese auto makers to improve their safety standards for those markets. I understand your point, and I'm saying give the Chinese car makers a chance; who knows where they will be in 10 or 20 years? It's too early to discount them.
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dontpanicApr. 21, 2009 - 11:57PM JST

MikeSato - I think youre being a bit quick off the mark. My comment was in response to the assertion that BYD have issued no recalls, implying their vehicles are of superior quality right now.

The Chinese have been motor manufacturing since the 1950s so not such an infant. Now struggling to meet huge domestic demand (1st or 2nd largest market depending upon whose figures you believe), copyright infringement, pressure to deliver and corruption in the beaurocracy all conspire to hold back quality. The only real pressure to improve is from makers looking to compete internationally.

I certainly dont think they should be discounted but I would be very surprised to see a great impact on the global motor market when there is still so much domestic demand. But 20 years from now, well who knows? Battery cars however arent the answer for China. Theyre no more than a stop gap semi eco measure that simply moves co2 emmissions away from the vehicle to the power plant and lithium-ion battery manufacturers.
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MikeSatoApr. 22, 2009 - 01:18AM JST

"MikeSato - I think youre being a bit quick off the mark. My comment was in response to the assertion that BYD have issued no recalls, implying their vehicles are of superior quality right now."

My comment on BYD was in regards to their record on battery production only, as I was responding to Kwaabish's comment :).

"The Chinese have been motor manufacturing since the 1950s so not such an infant."

Infant in the sense that their industry didn't produce cars for the average person. They mostly concentrated on industrial-type vehicles (trucks etc...) as opposed to civilian sedan types. The production of civilian vehicles started in the 80's (and I believe by this time, the American, European, and Japanese auto industry already had a solid foothold in their respective markets). The Chinese auto industry (up until recently) hasn't had much incentive to improve their designs due to a number of reasons -- compared to other countries, they have a small budget for R&D, generally a smaller domestic market since most people were still poor, and like you mentioned, corruption and bureaucracy.

"The only real pressure to improve is from makers looking to compete internationally."

Yup I agree -- in fact I think I mentioned it already.

"certainly dont think they should be discounted but I would be very surprised to see a great impact on the global motor market when there is still so much domestic demand. But 20 years from now, well who knows?"

I think we have an agreement here. With respect to global markets, isn't this more a matter of economics? If you can launch your product in more countries, you effectively increase your potential customers, especially when the US and Europe for example have much higher incomes than China's domestic market. This is what Buffet and his team are preparing to do with BYD, as evidenced by their recent stake (10%) in BYD. Please don't misunderstand, I'm not saying BYD and other Chinese auto makers are on their way to catching up with the likes of Honda or Toyota any time soon. I acknowledge that they have tons of work to do, but I also recognize that they have already achieved a lot, given their short time in the industry.
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dontpanicApr. 22, 2009 - 01:53AM JST

I believe the Chinese motor industry still doesnt produce cars for the average person, mostly for the addmittedly increasing numbers of relatively wealthy and up.

However I think we have broad agreement, except on the drivers. I think the major driver will be the Chinese domestic market looking to bypass the current oil based infrastructure. The same old pressures to produce will hold back quality. Any success BYD and Mid American get from exports will no doubt be hard won but I think relatively incidental.

I also believe the investment in western economies in alternatives to plug-in and hybrid battery cars will ensure these are a relatively short lived stop gap measure.