Fears over China joining global car race baseless

Peter Lok Kung-nam, China Daily, Asia News Network, Beijing

A usually supportive Western commentator has changed tack to doubt the likelihood of China becoming the car "manufacturer of the world" in the same way as it has for other consumer goods. His hypothesis: since the automobile sector forms the developed nations' core industry, they'll jealously guard their technological and marketing secrets developed over decades.

The take-over talks between SAIC, the mainland's largest car manufacturer (which makes GM and VW vehicles), and the last British-owned automobile-maker MG Rover were suspended recently because of differences over the terms. Among the conditions is a possible 100-million pound British government loan. And the May 5 UK elections could be an impediment to that. For the loan also requires the support of the Conservative Party that could emerge winners in the polls. So for now, it's wait and see, and ultimately, only an arm of MG could be sold off to SAIC.

A look at Japanese and British car-makers and their progressively interchanging positions after World War II makes the Western commentator's views seem a bit far-fetched. War-torn Japan's automobile industry recovered in the 1960s by making Austins, something the British used to make. But today, the reverse is true -- Japanese-owned firms in the UK are making Japanese-designed cars under British brand names. The same holds true for German-owned and other European country-owned automobile-makers in the UK. True, the Japanese are winners, but the British keep their jobs. Moreover, the automobile industry accounts for only one-fifth of the UK's manufacturing industry. So the prospect is far from gloomy for the native industry that has diversified into the service sector.

There's no need for the U.S. and European automobile industry to worry about losing jobs at home if they import China-made vehicles and share with the mainland their industrial and marketing secrets.

A recent news report said U.S. distributor Visionary Vehicles had signed a contract to import hundreds of thousands of automobiles made by Chery, a Chinese State-owned enterprise in Anhui Province, from 2007. Doesn't Walmart import and distribute China-made goods to create millions of jobs to sell them and offer U.S. consumers "good products at honest prices"? Doesn't that offset the loss of manufacturing jobs? And aren't the U.S. industries that have invested in China producing those goods? If the answer to all this is "yes", then why can't it apply to cars, too? In fact more than 55 percent of the goods exported by China are made by foreign invested units.

Designing and making an automobile is no big deal today because of the computer. And hence, there's no need to steal foreign designs. The advances in software have made manufacturing a whole new ballgame -- making light work of complicated technical problems. There's even such a thing called the Rapid Prototype Maker, a computer-controlled machine tool with which one can design and make any part of a mechanical contraption for quick trials in no time. That has made it possible for previously inexperienced manufacturers to catch up with, or even overtake, their experienced counterparts in this very risky business. That's how the Korean automobile industry has caught up with Japan and has been competing with it in the demanding markets of North America and Europe.

In the fastest growing market that is the mainland, the top Korean made-in-China brand has outsold three Japanese names (also China-made) in the first three months of this year, and together they have squeezed the market share of an old faithful German brand from about 25 percent to 11 percent. Therefore, it shouldn't come as a surprise that Visionary has put so much faith in Chery. After all, business is about risk-taking.