Chinese Cars

I’m not convinced by this:

Fifteen years ago, if you rode around in a Chinese domestic branded car, they felt like copies of Japanese, Korean, or German vehicles.  That’s because in most cases they were.  Chinese car companies that were not operating through a joint venture with a foreign brand and who therefore had to rely on their own designs largely copied popular models that were selling well.  The copying was legendary; a colleague at Toyota told me that they had a lot of respect for one of the Chinese companies in particular – their copy of one of Toyota’s popular models was so good you could take the doors off of it and put it on the corresponding Toyota and the door seals would work perfectly.  Firms in China first copied designs, then sourced parts, and finally built a factory and mass produced the car.

Right.

While some of that still goes on, leading Chinese automakers have moved on.  They have been aided by sophisticated computerized design tools that allow them to do their own design and modeling, a phenomenon that is becoming more and more important as know-how gets embedded in tools.

Designs of what? Bodywork? Engines? Gearboxes? Engine management systems? Without an example, he might be describing a copied Toyota with different bodywork.

These days, if you ride around in some of the leading Chinese brands, you will find sophisticated engines, turbochargers, complex automatic transmissions, and high levels of interior detailing.

Yes, I’m sure you will: but are they copies? And could the author tell if they weren’t? There’s a sleight of hand at play here which makes me wonder if I’m being told a load of bollocks.

The Chinese government is using the transition to electric as a way to surmount the historical advantages of incumbent car companies and nations.  It won’t be saddled by existing infrastructure for making internal combustion engines and old ways of working; it starts with essentially a clean slate.

This assumes electric cars aren’t some giant white elephant, hoovering up resources which would be better applied elsewhere. As I’ve argued before, without a major step change in battery technology, electric cars are a non-starter.

BMW recently announced plans to source batteries from Contemporary Amperx Technology Ltd. (CATL), and Volkswagen is focusing its electric vehicle development in China.

Is this because Chinese technology is wonderful or because their environmental legislation is non-existent, labour costs are low, and there are a billion potential customers outside the factory gate?

Tesla just announced plans for a new factory in China that will produce 500,000 vehicles a year.

Tesla announces grand plans on a weekly basis; few of them ever come to fruition. As an author of articles on electric vehicles, you should know this.

Chinese automakers and parts suppliers will harness the Internet in ways that haven’t been imagined in the rest of the world

Really? Those clever Chinese, eh? How will they go about this, then?

One of the things I wanted the students to see is how the Internet is evolving very differently in China, because of its “isolation” and the very different boundary conditions there.  For example, Government regulation tends to come after a new business idea has developed in the market, rather than beforehand as is generally the case in the rest of the world.

So the Chinese – who lock down the internet more than anyone else – are at an advantage because they can develop new internet-based business ideas before regulations catch up with them, and this will give car manufacturers an edge…somehow. Like many great ideas, it’s obvious once explained.

Also, physical delivery in major Chinese cities is very inexpensive, typically costing just over $1.  So it is remarkable how much Chinese consumers order things online – merchandise of course, but also lunch and al kinds of services.

Unlike in the US, Europe, and Japan where internet retail is a decade away and everyone traipses around shops. And what this has to do with car manufacturing is anyone’s guess.

We visited an automaker that offers a built-in WiFi hotspot with lifetime provisioning included.

Well that does it, I’m off to buy a Donfeng.

You can imagine the implications for turning the car into a platform.  Connected and self-driving car technologies are a natural amalgamation of complementary technologies that China seeks to dominate.

I think the guy who wrote this has come from rural China where he rode a bicycle all day. Western-branded cars have been connected to the internet for years – my own comes with a built-in SIM card – and it can best be described as a solution searching for a problem. Other than the real-time update of traffic conditions, an online search function in the GPS, and some remote-controlled functions it is largely useless. When I bought the car in 2014 the brochure boasted I could update Twitter from the car. The other day I received an email asking if I wanted to install MS-Office in my car, presumably so I could compile spreadsheets from the outside lane of the Autoroute. Any other online services I need while in my car can be accessed from my phone: none of this is new.

While the American public has a world view of the global auto industry centered on North America, Europe, and Japan, we should pay more attention to what’s going on in China. That’s where a lot of the action is going to be coming from.

I’m wondering who paid this guy and how much.

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25 thoughts on “Chinese Cars

  1. I don’t know about cars, but the Chinese have certainly done this with phones – first Western manufacturers had their phones made in China, then the Chinese cloned them, then the brought out better phones of their own.
    I’m writing this on a £150 phone with a 2 day battery life, a large screen, and generally decent specs – the big names can’t come close for the same money.

    I wouldn’t be shocked if the same happens with cars…

  2. I’m writing this on a £150 phone with a 2 day battery life, a large screen, and generally decent specs – the big names can’t come close for the same money.

    I expect this is the equivalent of their copied cars.

  3. I remember similar articles being written about Japanese cars in the early 1960s.

  4. “Government regulation tends to happen after a new business model is developed”
    Two way to read that
    Chinese law is similar to the English common law, whereby you can do what you like until a law is passed against it.
    Regulations are normally introduced after every new business model- either outlawing that model, preventing anyone from copying, preventing further development.
    The first would be good for ongoing development, the second would gum up the works.

  5. There’s several good reasons for doing all the electric car nonsense in China. They are heavy users of rare-earth metals for the motor/generator magnets, and there are two principal sources: USA and China. Snag is the refining creates a lot of radioactive waste (thorium) – Hey Greenies, windmills create radioactive waste!!! – and the USA has effectively blocked rare earth mining as a result. So it continues where the rules are, shall we say, more pragmatic.

    And the Chinese blocked exports of raw rare-earths, preferring to export them in high-value manufactured goods, such as cars.

    But all these Chinese cars is a universal good: they make cars cheaper for the customer, and they build a wealthy middle class in China. Good for our exports, good for stability. Why object?

  6. I’ve tried hard for years now to avoid Chinese products (and yes I know how are present in the unlikeliest places) because A. they are shit and B. why give money to a country that is a potential enemy that subjugates its citizens? I always try to vote with my wallet when possible.

  7. This reads like the kind of anti-Japanese propaganda during WW II, especially pre-WW II: little slanty-eyed half-blind yellow monkeys whose ships tip over when they turn, etc, etc.

    Anyone who has taught in a major American university in the physical sciences and engineering knows that a majority of the graduate students are foreigners, and most of them are Chinese. In some departments, an absolute majority of the students are Chinese.

    When they graduate, the great majority of newly minted Chinese engineers and scientists go home, taking their skills and knowledge with them. They greatly enrich China’s universities and industries, many of which are cutting-edge state of the art.

    Graduate education is not simply taking classes and book reading. It is an apprentice program in which students are taught how to do research by actually doing it under the supervision of a “master.” Graduate students invent theories and laboratory procedures, and their work is published in the major, refereed journals in the US and Europe.

    A great deal of what we call American technology was in fact invented by Chinese graduate students. So, when people start ranting about Chinese merely copying American and European stuff, they simply don’t have any idea of the reality.

    If all trade between the US and China were stopped, China would be left with high tech, modern factories and skilled workers, and we would have empty store shelves. Apple and Walmart and others would go bankrupt for lack of products to sell.

  8. So, when people start ranting about Chinese merely copying American and European stuff, they simply don’t have any idea of the reality.

    So this doesn’t happen?

  9. I remember similar articles being written about Japanese cars in the early 1960s.

    The Japanese have quality hard-wired into their culture. The Koreans do too, but much less so. The Chinese? Fuck it, that’ll do. There are good reasons why Chinese suppliers are banned on major industrial projects.

  10. All the silliness about coal-powered cars aside, there’s really no reason to doubt that China will eventually be able to build pretty good cars. They are following the very same trajectory as Japan and Korea. It’ll be interesting to see how their auto industry develops, since they have a yuge domestic market so they won’t have to be as export dependent as the Japanese and Korean companies were.

  11. My car has a sim… when I’m working away overseas I use the app that comes with it to set the horn and lights off just as I can see my wife and children about to get into it over the security cameras. Scares the shit out of them.

    Oh yeah and b the winter I can heat the seats before I get in.

  12. Hi Tim,

    I’ve worked in the auto industry for many years. Chinese cars are still shite and are entirely dependent on technology transfer from the mandatory JVs that Western OEMs must set up in order to build cars in China (lest they face onerous import duties).

    The article in question is another example of the media using appeal to authority and simply asserting things (” experts agree that diversity is good corporate practice”) to try and make them true.

    Bollocks

  13. Bob Sykes, funny man! the Chinese are tops at everything apparently and yet many of us will not work with Chinese tools or equipment for good reason, I’ll stick to stuff that works and lasts for more than 5 minutes oh and as for the racist angle you pulled my wife is Chinese and she doesn’t want any of the crap either.

  14. I agree with Max above, Chinese are not taking over world’s auto industry. I work for American consulting firm focuses on auto industry that has clients around world and major car makers are not at all worried about Chinese competition. Major auto companies have been producing vehicles for decades and have built up institutional memory, they understand how/why engines or interiors are built the way they are, while Chinese scientists or engineer are starting from scratch. And secondly, the business conditions in China are appalling because there is no rule of law and business culture is dire because it’s low trust society.

  15. One major differentiator for Chinese cars is that the Chinese have massive and very real air quality problems, with air pollution levels that are orders of magnitude bigger than western cities. Reducing air particulate pollution is something that the state is very serious about and it doesn’t discriminate between friends or foreigners when demanding improvement in engine performance in this regard. If anything it is this necessity to improve air quality that may in fact introduce some breakthroughs in electric powered cars.

    Although I still remain skeptical of electric cars in general.

  16. I worked for a company here in NZ that had its products built in China. I was appalled at the amount of intellectual property knowledge that the Chinese demanded before allowing production and export of the items. I told then that they must be mad and that in a few years,the Chinese will be cloning the technology but was met with a shrug and a “That’s the way it is because it just is” attitude.

    But there again, the Chinese have been piggy backing on foreign technology for a long while. I recall that one of the Japanese video recorder companies (can’t remember which one. Might have been Sony, Panasonic or Toshiba or another one) was going nuts because the demand for spare recording heads was going through the roof when they couldn’t duplicate the failures in their labs etc. Turns out that the Chinese were buying them and sticking them in their own recorders. Who’d a thunk it, eh?

  17. I’ve worked in the auto industry for many years. Chinese cars are still shite and are entirely dependent on technology transfer from the mandatory JVs that Western OEMs must set up in order to build cars in China (lest they face onerous import duties).

    We’ll know Chinese cars are good when people free of Chinese government influence, i.e. foreigners start buying them en masse and reviewing them favourably. Until then, it’s just one big sales pitch.

  18. If anything it is this necessity to improve air quality that may in fact introduce some breakthroughs in electric powered cars.

    Yeah, but their electricity is generated from burning shitty coal, thus contributing to the appalling air quality.

  19. my wife is Chinese and she doesn’t want any of the crap either.

    I remember Russians going to considerable lengths to avoid Russian goods, too.

  20. “Yeah, but their electricity is generated from burning shitty coal, thus contributing to the appalling air quality.”

    Understood, but there are massive improvements being made in minimizing pollutants for coal fired power generation plants as well. I am actually a qualified environmental engineer as well and I get so disappointed that we don’t focus on the real pollution issues and solutions like this as opposed to the war on harmless C02.

  21. Understood, but there are massive improvements being made in minimizing pollutants for coal fired power generation plants as well.

    For sure.

    I get so disappointed that we don’t focus on the real pollution issues and solutions like this as opposed to the war on harmless C02.

    Me too.

  22. Looks like the standard techy article to me. A great deal of copy & pasting from disparate sources & a narrative built round them. What the narrative is, whether there’s any truth in it, whether it’s even viable, isn’t the point. Articles in modern journalism need narrative. This is a narrative.

    They’re useful, in the sense they put all the copy & pasting in one place & make one aware of the individual factoids. Allows one to develop one’s own opinion on stuff one mightn’t be aware of. But, apart from that, the only reliable information contained in them is some vaguely techy guy’s got himself a number writing techy articles. Possibly with his photo in the by-line

  23. theProle

    “I’m writing this on a £150 phone with a 2 day battery life, a large screen, and generally decent specs – the big names can’t come close for the same money.”

    A cheaper version of something that already existed?

    A good example of where the Chinese industry is still operating is with motorcycles. Motorbikes are relatively simple, yet there is still no Chinese company that does anything other than flog either copies of older models, or buy a dead western brand (Benelli say), and get western designers to produce a new bike at a slightly lower price. Given the number of motorbike designs that have not changed in 20+ years, it tells you how far away from any serious development they are.

    The only place I’ve ever heard of anything close to actual quality out of China is in boutique stereo gear, there are some small companies run by ex-pat chinese doing this. Mostly I think because old school valves are easy to get in China!

  24. Phil B

    “I worked for a company here in NZ that had its products built in China.”

    Ironic! My business in NZ is getting products made in NZ, for Chinese companies, for Chinese who don’t trust Chinese products!

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