Joshua Allen says the Germans have cracked the Chinese auto market because they play by the Chinese rules, and that domestic Chinese car makers account for 85% of the market and the remaining 15% is mostly German cars. He also expresses surprise there aren't more Japanese or Korean cars. He should take a closer look, and revise his opinion about who is "playing by Chinese rules" and who's car designs represent the majority of the market.
I visited China in May 2002, and I might have drawn similar conclusions to Mr. Allen if I hadn't noticed that all those domestic brand cars are Japanese carmaker designs (and perhaps some Korean, although it is harder for me to distinguish between a Japanese/Korean car than Japanese/German. The Audis and VW's stick out like a sore thumb.) One has to keep in mind that there are many Japanese car designs that were never marketed in the U.S. (like all those subcompact vans - made small to be able to maneuver on the narrow and winding roads in Japan) of which you can see plenty in China - and which an American might think were locally designed. No doubt the many Japanese designed cars to be seen there are licensed and manufactured by 100% Chinese owned companies, but I'll bet the Japanese are quiety taking their share of profit by selling the tools and consulting to manufacture their designs. The Japanese are up against an incredible public image problem due to the history of World War II. The Chinese government doesn't hesitate to remind everyone on a frequent basis how bad the Japanese were (are, in their mind) while at the same time asking Japan to invest more and more in their country. During the Japanese "Bubble Economy" years, consultants advised Japanese manufacturers that they should change their names used in the U.S. to sound less Japanese, to avoid American anti-Japan sentiment (American inferiority complex, really) - hence today we have Lexus and Infinity (really Toyota and Nissan.) In China therefore, it also seems a wise strategy for the Japanese to sell their designs under a Chinese name.
China is following Japan's developing economy playbook by requiring foreign companies to have a joint venture partner and to perform "technology transfers" to Chinese companies - both the Germans and the Japanese are licensing designs to Chinese companies. (If you ask a Chinese person about Japanese cars in China, they very well may not know that all those Tianjin Xiali taxis they are riding in are really Toyoto Echos.) I don't have any statistics on hand, but I believe it would be enlightening to compare the ratio of German to Japanese money dumped in the Chinese economy. The Chinese government would never admit to the help they get from Japan because it contradicts the vitriolic rants they so frequenty make about Japan. This is a frequent source of complaint among Japanese people - how little appreciation they get for their economic role in China, and why should they be helping a future competitor?
The only domestically designed car I recognized in China was the excellent Hongqi luxury sedan, which seemed to me as good as any Lexus or Mercedes. I rode in one from Shanghai to Nanjing - courtesy of my wife's very rich college friend. The interior was leather with hardwood paneling, and was very comfortable to sit in. These are big black sedans that are reserved mostly for people of infuence. You can see them on occasion in China - with their dark tinted windshields and their arrogant manner of driving (get out of the way and don't mess with me.) The Hongqi was the first domestically produced Chinese car, debuting in 1958. These days, Hongqi also produces a number of Audi designs branded with the Hongqi badge.
11:22:30 PM 
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