China's Embrace of Foreign Cars - NYTimes.com - 0 views
-
Chinese consumers increasingly favor American brands, which have a reputation for safety, youth and international flair. The domestic brands have tended to lag in surveys of initial quality and engineering, although they are starting to close the gap. In long-term reliability, they are far behind and falling even further.
-
Multinational corporations are steadily clawing market share from Chinese brands in their home market
-
as a succession of global brands have pushed their way into China
- ...17 more annotations...
-
Rising affluence has left consumers reluctant
-
to accept cheaper, spartan models from domestic manufacturers
-
They want to persuade China’s Commerce Ministry to retain a requirement seldom found in other top manufacturing nations: Foreign automakers may assemble cars in China only through 50-50 joint ventures with domestic partners.
-
“If there is a loosening of the restrictions on foreign ownership in automotive shares, it will instigate massive changes in the configuration of our country’s automotive industry,”
-
“The cap has hindered fair, open and transparent competition, which undermines the interests of consumers and the overall competitiveness of the Chinese auto industry,”
-
“It is our common goal to further develop these and to be successful together in the Chinese automotive market,” Volkswagen said in a statement.
-
The original goal of the joint venture requirement was to force multinationals to work with big, state-owned automakers with ample access to credit from state-owned banks. The ministry’s hope has been that the state-owned automakers would learn from their partners to build world-class cars that they could then export
-
The multinationals have continued to provide most of the designs, engineering and marketing. They build essentially the same cars that they sell in the rest of the world
-
domestic brands had only 29.5 percent of the car market last year
-
Ford’s joint venture here in western China has 15,000 employees who assembled more than 600,000 vehicles last year, making it Ford’s largest operation outside southeastern Michigan
-
The second factory is among the most modern anywhere in the world: Steel coils go in one end and finished cars come out the other just eight hours later.
-
Domestic Chinese automakers have also bought robots for their operations from international suppliers. But they have tended to rely much more on using huge teams of workers for manufacturing, and they have struggled to figure out how to integrate robots efficiently into assembly lines — a task that took decades for multinationals to master
-
-
<-- This 50-50 Domestic and Foreign part requirement is interesting in the fact that I have never heard another country implicate a guideline like it. It certainly goes against what is found in the US (IE. The vehicle is either 100 percent foreign or 100 percent domestic...rarely both.
-
-
-
This bit of text here exemplifies the Human Geography them of Globalization, or the diffusion of ideas and innovations to other regions. By allowing international manufacturers like Ford to form joint ventures with its domestic manufacturers, the Chinese state hopes that important ideas like an aspect of a design or Aerodynamics will "rub off". These industry secrets if you will would, in turn make Chinese domestic cars much more valuable and safe.
-
-
-
The fact that Chinese domestic manufacturers are can't use robots as efficiently as their international counterparts is just the classic case of under-skilled labor within the secondary sector.. Because international corporations have been around for years, they have been able to master and teach the techniques of operating a complicated machine like a robotic arm. In turn, they are much more efficient in their production and generate a higher profit. On the other hand, China is relatively new to the light vehicle scene and as consequence it's workers aren't as experienced.
-
-
-
My only question is why have the 50-50 cap in the first place? Is it to protect domestic companies and act as a tariff in a sense? Or is it their to allow the Chinese government to tax the multi-national vehicles?
-
-
-
The article had mentioned that Chinese domestic vehicle manufacturers were unpopular with the public due to poor crash test results and safety risks. This other article relates seeing how it explains how Toyota had to recall over 6 million vehicles due to product defects that could pose a serious safety threat. Here's the link:http://www.nytimes.com/2014/04/10/business/international/toyota-to-recall-vehicles.html?rref=business/international&module=Ribbon&version=context®ion=Header&action=click&contentCollection=International%20Business&pgtype=article
-
