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Shadow Play on China's Auto Industry, Home-made Auto Only 'Puppet'
In China, auto exhibition has never been so attractive with throngs of people rushing to see new models. People who have got rich have developed a desire for sedan cars and this has attracted many foreign carmakers. Presently China's auto market is just like a shadow play being staged, since almost every home-made new model is a follower of its foreign counterparts.
Two leading roles, FAW-VW and Shanghai VW, are fighting each other under the direction of Volkswagen (Germany). For purpose or not, the German director has selected models of the same level for the two VWs, Jetta and Santana. Therefore the two "brothers" grow up in competition, taking altogether 52 percent of China's market share for Volkswagen.
But the fighting never ends. After "Bora" rolled off production line FAW-VW's sales manager Zhou Yongjiang boasts that "Bora" has no match in China. While his Shanghai-VW counterpart Xiao Guopu can not help to worry about Santana 2000, which is of the same level with Bora. Perhaps after Shanghai-VW's Polo is put out at yearend FAW-VW would then worry about low-priced Jetta.
No matter how fierce the fighting is, the balance would not be broken as long as German VW exists, for both VWs in China bring benefits to it.
Different from VW, Shanghai GM's Sail and south Asia's Fiat Palio staged a "sequel", with its original version being in Brazil between Opel-Corsoa and newest Palio. Being got an upper hand by Fiat, GM firstly took China and changed Opel-Corsoa into Buick Sail. While Fiat came late, and it's no easy thing to defeat GM by its Palio put out only this year.
This is even the same with luxury cars. Competition between Accord and Buick lasted several years while Accord is welcomed in most areas including North America. So no wonder Zhuangzhou Accord sells better than Shanghai Buick in Chinese market.
However, to many auto joint ventures, they are not in an easy position to stage 'shadow play' since their very activity will be under control as the character of 'shadow'. Any petit incaution will lead them to be 'cast away', which has been proved indefinately by the fate of Guangzhou Peugeot and Sanjiang Renanlt.
For the end, some domestic big auto manufactures have started to upload their ammunitions in an attempt to alter the status quo playing as the 'puppet'. Following the suit of Shanghai Volkswagen, Shanghai Automotive Industry Corp. has set about to cooperate with General Motors (GM), while Dongfeng has targeted Japan's Nissan to show his dissatisfaction to its relation with Citroen, seemingly in harmony but actually at variance. It's said that Nissan's officials have recently shuttled to places like Wuhan, Xiangfan and Shiyan to seek possible cooperation. It's of much possibility to spot Nissan's figure at the 'shadow play' stage of China's auto market.
Paradoxically, domestic automakers will find themselves more deeply entangled in difficulty should there be no shadow puppet to play, especially in front of fierce competition from foreign auto giants. Even Hongqi (Red Flag), the only local sedan brand in China, has reportedly to seek foreign venture for cooperation.
Actually, the inflow of foreign auto conglomerates should not be worthy of a big fuss to us, under the condition that relevant governmental departments would make out appropriate policies besides the strengthening of macro-control. Various encouraging rules and policies have come out lately for the further development of auto market in China, especially in relation to the environmental protection, for example, the sale of 187 types of carburetor cars have been forbidden starting from September 1.
By PD Online Staff Li Heng
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