24/2/2012 - Will the roads be full of Chinese cars in 5 years' time?
A couple of weeks ago, I was watching a report on a popular motoring TV show asking whether we will all be driving Chinese vehicles in five years' time, and so I decided to use my own unique brand of research and guesswork to look into it...
China's economic growth shows no signs of slowing and its influence is already being felt in every area of industry, so surely it's only a matter of time before Chinese vehicles take over the roads. The facts behind China's explosion in car use and manufacturing are impressive - in 1977 there were 1m vehicles on the road, compared to the current 85m - in China a car is bought every 2.3 seconds.
However if you scratch beneath the surface of these figures, you'll see that Chinese OEMs only account for 25% of the market whereas global brands account for 70%. The estimated 77 Chinese carmakers currently neither have the multi-million pound R&D budgets nor the brand prestige to compete with heavyweights such as Audi, BMW, Jaguar Land Rover and Mercedes. BMW for example spends more on R&D than the top 10 Chinese OEMs combined.
So the Chinese car manufacturers have a long way to go to dominate their domestic market, before they even think about taking on the premium brands on a global scale. And that's without getting into issues such as CO2 regulations, build quality, pricing and even the growing cost of manufacturing in China (which is now more expensive than parts of Europe.)
However, the first steps are being taken with news this week that Great Wall Motor has become the first Chinese carmaker to open an assembly plant in Europe. The factory in Bulgaria will eventually produce 50,000 vehicles a year. It will manufacture Great Wall's Hover SUV, Steed pick-up and Voleex city car models.
For my money, I don't think that the next five years will see an explosion in Chinese cars on our roads; there are a lot of serious barriers to break down before we all shift allegiances from our current brands. Instead I foresee a slow build up of awareness and product development similar to the Japanese car revolution in the 70s and 80s. Where I do think the impact will be felt is through vehicle design trends - more and more cars will be produced with one eye on Europe and the other on the lucrative Chinese market. But what do you think?
There's a thought to leave you with for the weekend, have a good one.
My question for you, is have you actually driven a Chinese car yet?
They are simply awful. My pet hate is the GQ Cherry a particularly nasty little CVT thing.
If the Chinese continue to produce product like this they are not going to sell it very well at all. China does have serious quailty issues with all sorts of products from stainless steel cutlery that rusts and up. The only chinese product worth having at the moment is where it is heavily overseen by Global name brand manufacturers.
That will transpose to the car Industry for some time to come I expect.
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