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How Chinese automakers are going for world domination

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chinese auto worker
An auto worker assembles suspension components at the FAW-Volkswagen plant in Chengdu, China. -- AFP

What if we wake up one day and the Chinese already own all of the global car industry? That’s a preposterous thought, isn’t it? But then my concept of impossible got violently upended as soon as Donald Trump became the US president. Indeed, never say never these days.

First of all, China is, by far, the biggest car market in the world, selling more than 23 million units in 2016. The second-largest market, the United States, did 17 million units, while all of Europe managed 15 million units. The US, once the planet’s number one consumer of motor vehicles, has been hovering between 15 and 17 million units for the past four years. By contrast, the growth of car sales in China has been consistent, if not meteoric, having moved “merely” 16 million units in 2013.

With a market as dominant as China’s, we have Western automakers falling over themselves to do business there. Not just to sell cars, mind you, but to put up R&D facilities and manufacturing plants. And if their Chinese partners or Chinese government officials display any signs of irritation toward them, said Western companies are often willing to bend over backward just to be able to continue selling vehicles in a gold-mine market.

The Chinese want a special model exclusively designed for them? Done. The Chinese want technology-transfer partnerships? Done. The Chinese want favorable business concessions? Done.

It’s the reason we now see impressive vehicles from Chinese car brands that nobody outside of China has heard of. They invite veteran players to their domestic game, they copy the style of play, and now they’re poised to win the world championship. They are so powerful and influential today that they can even dictate the direction the industry is going. Do you honestly think all the executives of American, Japanese and German auto firms just grew a conscience one day and decided to go electric? I suspect it’s because the Chinese market has been prioritizing EVs for years now, with the authorities even declaring a serious intent to stop the production and distribution of traditionally powered vehicles.

So now that the Chinese have successfully learned and copied the car-making technologies of their Western partners, it’s time to focus on branding. Let’s face it: Who would want to buy Chinese cars outside PRC? Sure, they sell 23 million units at home, but overseas car buyers still look at their products with disdain.

Time to use all the acquired wealth on internationally recognizable brands. They’ve either bought or invested in struggling marques (Volvo and Lotus) and extinct ones (MG Rover and Borgward). If you think they’re fans of these brands and are interested in reviving the latter’s old glory, that naive mentality is exactly how the Chinese have managed to finagle their way to their current position.

Recently, Geely-owned Volvo announced that its performance division, Polestar, would now be a stand-alone EV brand, even unveiling the first model from its newly constructed stable, the Polestar 1. This car is still propelled by a hybrid system, but the next offerings will be fully electric, according to Volvo.

For sure, Polestar is more palatable than Chery, right? And Borgward is far more appealing than Foton, one of the brand’s Chinese investors. Soon, we could be seeing long-dead Western brands from the 1930s make a comeback, with Chinese mechanicals inside their cars.

Clearly, the Chinese have an agenda (which normally would be okay since no business entity doesn’t have a self-serving agenda). But China’s plan seems to be carried out using perniciously devious means. It’s gradual, steady, relentless.

One day in the not-so-distant future, we could all be staring at car-shopping short lists that do not include Toyota, Mitsubishi, Honda, Nissan and Mazda. Are you ready for Hawtai, Xinkai, Hongqi, Shuanghuan and Jonway? Me neither.

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