 In late April this year when China did not fully recover from the fatal SARS epidemic, a large scale automobile exhibition was held in Shanghai, the financial center and commercial hub of China. Almost all the world auto giants couldn’t wait to throng into the huge market in taking a share. In the eyes of the audience who appreciated the various new models very much, the shining logos and dazzling cars on the stage caused a new wave of modern auto fashion. Apart from all the famous foreign brands, the few local names also turned out as music to the ears of the car-hunger Chinese, though sounding not so vibrating. With the market door gradually opening to all the potential players, how can the mid-runners of the Chinese auto manufacturers meet the fiercer competition brought by the economic globalization?
“We can say that the Chinese auto industry has experienced competition for more than twenty years since the reform and opening. Two decades of competition helps the auto industry reach current level. But plenty of problems occur during the process. So it is very hard to lay out a timetable as to when we will be able to race against the foreign competitors. In my opinion, one of the main problems facing domestic automobile makers is insufficient opening. I think that following the road of the Chinese home appliance industry is a must to rise to rival against the foreign companies. That means the final winners will come out of full market competition. As the final winners can go through the market competition, they will have more competitiveness or the ability to shun off risk and external impact,” said Jiang Yuan, official of National Statistics Bureau.
Actually, among the hundreds of auto companies in China, a large number of them are the so-called assemblers with no core competitive power at all. The step-by-step lift of tariffs and non-tariff barriers will no doubt elbow them to a more direct confrontation with the ambitious foreign enterprises. There is no place to hide for now. Instead, there is time for them to catch up with those big names in a balanced way.
“One controversial topic at present is whether to be open or to be independent. But I reckon it as a matter of balance. It is hard to say that you should remain totally independent or fully open. Actually we ought to keep a state of balance. That is to say we try to maintain independence instead of being close-minded and to remain open while avoiding dependence on others. Such a complexion of independence, opening, cooperation and competition need to be formed,” said Ouyang Minggao, Dean of Department of Automotive Engineering of Tsinghua University.
The Dongfeng Auto Group is one of the three major Chinese auto manufacturers. To get more ready for a hand-to-hand competition, it has been following a road of learning through cooperation.
Late last year, Dongfeng signed an agreement with the Japanese auto giant Nissan on a long-term and comprehensive cooperation. This was clearly aimed at reinforcing its current role in China and gaining a favorable position in the future world auto map.
To strengthen its capability of independent research and development, necessary facilities were invested in the R&D center for testing new models of cars. The various kinds of testing roads were designed to help its own products driving smoothly toward the market. Besides, the Dongfeng Auto Group set the goal of nurturing a national auto development zone in Xiangfan, where it is located. Based on its comparatively long history of auto manufacturing, all these efforts have been made in a steady and sure style.
“China kicked off its auto industry in a way of independent development when it was lack of conditions for cooperation with foreign companies at that time. In fact, during the more than two decades between 1950’s when the first Chinese automobile rolled off the line and early 1980’s, the auto industry in China had developed by itself. So it is not proper to say that there is no such basis. Instead, there is basis to some degree available for current independent development as we boast of our own team and talents. Through the years of learning from foreign companies, we’ve got this kind of perceptual knowledge. Now the material base is available too,” said Jiang Yuan.
According to some experts, China’s auto industry is in its first phase of fast growing period. That is to play a role of student who needs to humble himself while being keen to learn more. But this is not too long a way to go.
“The second phase will come in the next 5 to 6 years. The Chinese auto industry will undergo a period of development and expansion. The desire for independently technological research and development by domestic auto makers will markedly increase. The sole R&D by individual company will give way to popular actions by all the auto makers which need to develop their own products. It is till then that the auto industry will become the pillar industry in the Chinese national economy,” said Ouyang Minggao.
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