Another notch in the belt of the BRIC! This is a good example of how Globalization links with Technology (Transfer) and Regional Foresight! A lesson to both here and there..(Comment by Max)
The innovative Chinese automaker: "
This has to be a source of consternation for any American company sharing its innovation & design expertise with business partners in China: the Wall Street Journal (link via Pittsburgh Post-Gazette) reports that Shanghai Automotive Industry Corp., a long-time partner of GM and Volkswagen in China, plans to go it alone and produce a luxury four-door sedan - all by itself - for the Chinese market. The new sedan will compete head-to-head with rival offerings from GM in China and there are even plans in the works to start exporting the Chinese-made and Chinese-designed car to Europe sometime in 2007:
'For years, Shanghai Automotive Industry Corp., a government-owned behemoth, has worked side by side with General Motors Corp. and Volkswagen AG on world-class assembly lines to build cars for the Chinese market. Now, the giant auto maker is getting ready to use the technical expertise and experience it has gained from these partnerships -- which turn out hundreds of thousands of Buicks and Chevys as well as VW Santanas and Passats a year -- to make its own high-end sedan.
Shanghai Automotive's shift from an ally of its foreign partners to a potentially dangerous rival is a sign of sweeping changes ahead for auto makers in the fast-growing China market, which has become an increasingly important source of sales and profits for U.S. and European auto companies. Prodded by Chinese economic planners, large state-run companies that have joint ventures with other foreign manufacturers, from Ford Motor Co. of the U.S. to Japan's Suzuki Motor Corp. and South Korea's Kia Motors Corp., are also moving to develop and sell more vehicles under their own brand names. The push comes amid a broader questioning of the role that foreign companies and brands should play in China's economy.'
A consultant for the automobile industry rings the alarm bell: 'This is a watershed in the development of the auto industry in China. The Chinese formed joint ventures for one purpose: to learn how to do it themselves one day. That day is here.'
So that's what happens - a big American company sends jobs and R&D know-how overseas in the hopes of expanding global market share, and it winds up with an ungrateful partner willing to bolt at the first opportunity? For GM, already beset by gargantuan financial woes, this has to sting. If nothing else, the decision by Shanghai Automotive means that the GM board won't be able to use the 'our cars don't sell in America, but we're doing real well in China' excuse anymore. In a prepared statement, GM tried to put a positive spin on the development, but we all know the company is smiling through gritted teeth: 'GM understands Shanghai Automotive's desire for further growth and is confident SAIC recognizes that the success of both companies in the China market is closely linked to the success of our joint ventures.'
More details about the decision by Shanghai Automotive to head off on its own can be found at CNN/Money. Details about Shanghai Automotive (not exactly a household word here in America) are also up at Wikipedia.
Tags: China auto GM ShanghaiAutomotive innovation design
[image: AutoBlog]
"
(Via Business Innovation 2005.)
Comments