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Author Topic: China's Auto Industry A Disaster  (Read 1150 times)
Palumboism
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« on: April 18, 2015, 07:28:44 PM »

January 12, 2015
Foreign marques surge ahead in China car market
Tom Mitchell in Beijing
[snip]
Chinese carmakers have blamed a broader slowdown in the world’s second-largest economy for their own poor sales performance last year. In October, the government reported its slowest quarterly economic growth figure — of 7.3 per cent — in more than five years.
Sales of Chinese passenger sedans fell more than 17 per cent last year, leaving domestic brands with a market share of just 22 per cent in the segment, compared with a 27 per cent share for German brands.
Dong Yang, CAAM secretary-general, said Chinese drivers did not appreciate the improvements made by domestic brands this year. “They improved their products and reduced their prices,” Mr Dong said. “But Chinese people care too much about [the cache of foreign] brands. I think this trend will continue in 2015.”

http://www.ft.com/intl/cms/s/0/91d1bd62-9a2e-11e4-8426-00144feabdc0.html#axzz3XiVUCbMB



China has over ten uncompetitive auto companies sharing just 22% of the market.  The clear solution is to remove the government entirely from the auto industry and allow uncompetitive companies to merge or fail.  None of these Chinese auto companies has the sales volume or resources necessary to properly develop cars and as a result they are producing garbage. 
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Palumboism
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« Reply #1 on: April 18, 2015, 08:01:11 PM »

 Asian Business News
Chinese Car Makers Struggle to Lure Buyers
[Snip]
Mr. Ying used to drive a Zhonghua, a brand once owned by BMW's China partner Brilliance China, that cost him around 180,000 yuan, or $29,200. "It wasn't really what I expected," he said. "Overall, it was aesthetically appealing, but it just didn't feel sturdy when I drove it." He upgraded to a 450,000 yuan Audi. "It was exactly the type of car I wanted because it's German...It feels powerful to drive and it's sturdy."

[snip]
"Quality is improving, but the customer doesn't perceive that," Mr. Broderick said. "Chinese love brands and the perception among Chinese consumers is that if you have the wherewithal you'll buy a foreign brand."

Libra Hu, a 23-year-old technology company employee in Beijing, drives a 600,000 yuan Audi—a wedding gift from her and her husband's parents. "The whole car was produced and imported from Germany. We trust its quality and [Audi's] service."
[Snip]


http://www.wsj.com/articles/SB10001424052702304626304579512144185637348



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denarii
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« Reply #2 on: April 25, 2015, 06:41:34 AM »

Everything is low quality in china. That is down to the people living there.
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Palumboism
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« Reply #3 on: April 26, 2015, 10:20:27 AM »

Top selling car brands in china, with Chinese brands in bold.  The reality is, the Chinese prefer foreign brands.

1   Volkswagen   2,710,504
2   Wuling       1,404,797
3   Hyundai      1,120,048
4   Changan      975,431
5   Toyota      956,282
6   Buick              917,017
7   Nissan      859,490
8   Ford               801,603
9   Honda      795,408
10   Chevrolet      767,001
11   Kia              646,036
12   Dongfeng      555,390
13   Audi               513,000
14   Chery      476,162
15   BYD              437,857
16   Haval              429,328
17   Geely      425,773

18   Peugeot      384,005
19   Citroen      320,011
20   BAIC              299,184
21   Skoda      282,390
22   BMW              278,195
23   Suzuki      263,232
24   Mazda      204,652
25   JAC              195,799


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Palumboism
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« Reply #4 on: April 26, 2015, 10:35:08 AM »

Here's why the the Chinese auto industry is a disaster. It is generally agreed that in order for an auto company to be competitive it needs to sell at least 4 million cars per year.  Which is why you see smaller companies such as Fiat, Chrysler, Nissan, and Renault merging. Not one of the top eight Chinese auto companies produces over 1 million cars per year.  If the Chinese government was smart, it would force an industry consolidation.

Changan         975,431
Dongfeng        555,390
Chery              476,162
BYD                437,857
Haval              429,328
Geely              425,773
BAIC               299,184
JAC                 195,799

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« Reply #5 on: April 26, 2015, 11:39:05 PM »

I think Changan and Dongfeng also produce heavy equipment.  I'd have one if someone gave it to me as a gift.  Maybe.  BAIC make Foton tractors.  From what I've read I wouldn't even accept one under the christmas tree.

The only thing I've heard of the chinese doing well is solar panels.  And a shit ton of good that'll do you if you don't want to lay out $15k for a battery bank.
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Palumboism
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« Reply #6 on: April 27, 2015, 07:23:01 AM »

I think Changan and Dongfeng also produce heavy equipment.  I'd have one if someone gave it to me as a gift.  Maybe.  BAIC make Foton tractors.  From what I've read I wouldn't even accept one under the christmas tree.

The only thing I've heard of the chinese doing well is solar panels.  And a shit ton of good that'll do you if you don't want to lay out $15k for a battery bank.


Not one of these companies could survive outside of China.  When they do try to sell outside China, they target countries in Africa, South America, and the Middle East. 

General Motors President Dan Ammann told a Detroit investors conference in January that the Chinese auto market “is maturing rapidly . . . [Its] rate of growth will decrease year-to-year.”

However, in 2014 GM made $2.1 billion in China, about a quarter of its earnings in North America, where it sold 130,000 fewer vehicles. The problem is, around half of the vehicles that GM sells in China are Wulings, inexpensive, low-margin minivans designed by one of General Motors’ Chinese partners, targeted mostly at commercial buyers. Indeed, Chinese customers bought 1.6 million Wulings and only 79,000 high-profit Cadillacs in 2014.

http://www.washingtonpost.com/business/reconsidering-the-value-of-globalization/2015/04/24/7b5425c2-e82e-11e4-aae1-d642717d8afa_story.html
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Tapeworm
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« Reply #7 on: April 27, 2015, 07:42:49 PM »

Chinese cars are finding a market in Aus.  It's only because non-chinese cars are insultingly priced.  A toyota landcruiser is over $100k.  Roll Eyes  I was tempted by 'Great Wall' myself but decided I'd rather spend $50k well than $25k badly.  In the end, I haven't spent anything and am still driving the same crappy van.

The thing with cars is it's difficult to judge quality by second hand reports.  People invariably neglect maintenance and then talk shit about quality when there's a breakdown, so time won't necessarily tell.  Even comparing incidences of breakdown, if such data is available, doesn't help since it seems likely that the guy who opted for the cheaper car is also going to spend less maintaining it.  There's also a lot of prejudice against chinese goods, which is totally justified and which I endorse because everything of chinese origin that I've ever owned was a disposable piece of shit.  

It's not like someone over there couldn't make a decent car if they wanted to and eventually, either now or later, someone will.  But even if they do, at this stage they need to convince me that they're not like every other chinese manufacturer I've witnessed.  Idk how they could arrange some sort of independently overseen quality control, especially at the metallurgy/foundry stage, but they need to do something other than just advertise a 1/2 price car if they're going to get my money.  I'm old enough to remember the Yugo.
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Palumboism
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« Reply #8 on: April 28, 2015, 07:32:32 AM »


The thing with cars is it's difficult to judge quality by second hand reports.  People invariably neglect maintenance and then talk shit about quality when there's a breakdown, so time won't necessarily tell.  Even comparing incidences of breakdown, if such data is available, doesn't help since it seems likely that the guy who opted for the cheaper car is also going to spend less maintaining it.  There's also a lot of prejudice against chinese goods, which is totally justified and which I endorse because everything of chinese origin that I've ever owned was a disposable piece of shit.  



So, you're worried about the quality of the steel, but not the pre treatment before priming, or the priming and paint, or the quality of the spot welds, or the design of the crumple zones, or the quality of the plastics, or the protection on the electrical wiring.  My point is, there are many design and manufacturing steps that go into building a quality automobile.  Can the Chinese perform all these steps correctly, yes, but.  But, it requires $$$, about $1 billion dollars per model.  If you have ten manufacturers producing ten models that's $100 billion every four years.  Where will these small companies come up with that kind of money?  They won't, but they are still going to produce all of those models by cutting corners where ever they can and it won't just be the quality of the steel.  



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« Reply #9 on: May 06, 2015, 10:32:50 PM »

Chinese cars are finding a market in Aus.  It's only because non-chinese cars are insultingly priced.  A toyota landcruiser is over $100k.  Roll Eyes  I was tempted by 'Great Wall' myself but decided I'd rather spend $50k well than $25k badly.  In the end, I haven't spent anything and am still driving the same crappy van.

The thing with cars is it's difficult to judge quality by second hand reports.  People invariably neglect maintenance and then talk shit about quality when there's a breakdown, so time won't necessarily tell.  Even comparing incidences of breakdown, if such data is available, doesn't help since it seems likely that the guy who opted for the cheaper car is also going to spend less maintaining it.  There's also a lot of prejudice against chinese goods, which is totally justified and which I endorse because everything of chinese origin that I've ever owned was a disposable piece of shit.  

It's not like someone over there couldn't make a decent car if they wanted to and eventually, either now or later, someone will.  But even if they do, at this stage they need to convince me that they're not like every other chinese manufacturer I've witnessed.  Idk how they could arrange some sort of independently overseen quality control, especially at the metallurgy/foundry stage, but they need to do something other than just advertise a 1/2 price car if they're going to get my money.  I'm old enough to remember the Yugo.

mate import a car from japan they are really cheap to buy there. plenty of importers in aus that can do it have a google around. for 10k you could be driving a sweet subaru legacy twin turbo or toyota aristo (lexus gs300 with supra motor) with well under 100k kms on it in great exterior and interior condition.
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Tapeworm
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« Reply #10 on: May 07, 2015, 08:59:57 AM »

mate import a car from japan they are really cheap to buy there. plenty of importers in aus that can do it have a google around. for 10k you could be driving a sweet subaru legacy twin turbo or toyota aristo (lexus gs300 with supra motor) with well under 100k kms on it in great exterior and interior condition.

Sound advices but I'm more of an auction guy these days.  Some very nice trucks are going for a song in WA at the mo so will likely stick my hand up for one ere long.  God bless the mining downturn.

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dr.chimps
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« Reply #11 on: May 16, 2015, 08:36:53 AM »

January 12, 2015
Foreign marques surge ahead in China car market
Tom Mitchell in Beijing
[snip]
Chinese carmakers have blamed a broader slowdown in the world’s second-largest economy for their own poor sales performance last year. In October, the government reported its slowest quarterly economic growth figure — of 7.3 per cent — in more than five years.
Sales of Chinese passenger sedans fell more than 17 per cent last year, leaving domestic brands with a market share of just 22 per cent in the segment, compared with a 27 per cent share for German brands.
Dong Yang, CAAM secretary-general, said Chinese drivers did not appreciate the improvements made by domestic brands this year. “They improved their products and reduced their prices,” Mr Dong said. “But Chinese people care too much about [the cache of foreign] brands. I think this trend will continue in 2015.”

http://www.ft.com/intl/cms/s/0/91d1bd62-9a2e-11e4-8426-00144feabdc0.html#axzz3XiVUCbMB



China has over ten uncompetitive auto companies sharing just 22% of the market.  The clear solution is to remove the government entirely from the auto industry and allow uncompetitive companies to merge or fail.  None of these Chinese auto companies has the sales volume or resources necessary to properly develop cars and as a result they are producing garbage. 

Grin

/why, yes, i am 5-years-old
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Palumboism
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« Reply #12 on: May 20, 2015, 04:42:59 PM »

Grin

/why, yes, i am 5-years-old

I'm just saying it's clear to any American. Does the Chinese government realize they are hurting the industry more than helping it? I don't think so.

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dr.chimps
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« Reply #13 on: May 23, 2015, 07:53:58 AM »

I'm just saying it's clear to any American. Does the Chinese government realize they are hurting the industry more than helping it? I don't think so.


The Chinese government is an (Communist?) ideology that is trying to tail a now capitalist tiger economy. Tough gig. Don't think they give a shit as long as they stay in power.
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Victor VonDoom
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« Reply #14 on: Today at 09:41:21 AM »

The Chinese government is an (Communist?) ideology that is trying to tail a now capitalist tiger economy. Tough gig. Don't think they give a shit as long as they stay in power.

Doom agrees!
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