Chinese Auto Race

The race to get in on the ground floor of the Chinese automarket is in full swing, with domestic players and multi-nationals vying for an edge. While there figures to be few imports of Chinese cars to North America in the near future, western observers are paying close attention to developments in the Chinese auto industry.

Today there are only 8 cars for every 1000 Chinese old enough to drive, compared to 940 in the U.S. Shanghai Automotive Industry Corp., or SAIC, appears to be the best positioned domestic producer. The firm has joint ventures with each of the largest foreign manufacturers in China, Volkswagen and General Motors.

Other important firms include Great Wall, Chery Automobile Co and Geely Motor. Chery has been accused of stealing design secrets--hardly surprising given the abysmal support for intellectual property rights in the Chinese justice system. The Geely F1 was among dozens of new models unveiled at the Beijing Auto Show back in July 2004. The car looks like a Formula One/Indy car. Obviously this thing will is not even close to being street legal in the U.S. (nor will any of Geely's cars pass emissions standards), but the design demonstrates the firm's desire to generate buzz .

USA Today published an amusing article a while back about an Arizona businessman (scam artist really) who aims to be Geely's main representative in the U.S. automarket. I've dealt with the firm extensively and know that they produce some of the lowest quality motorscooters you'll find. Type "scooter" into eBay and witness all those $500-700 models--most are Geelys. Not one will go 1,000 miles before ending up in the mechanics garage--a place it is likely to reside for some time. Until Geely and other Chinese firms (guilt by association?) improve quality drastically, they will not be able to take over Korea's role as producers of low-end American vehilces that nobody really wants.