Detroit's big showing at Beijing's auto show
Even Chrysler is making moves to get a piece of China's market.
By Jim Woods
A decade ago, nobody paid much attention to the notion of an automobile trade show taking place in China, but oh, have times changed.
Last Friday marked the start of the Beijing International Automotive Exhibition, and nearly every major automaker is displaying its latest models at the event in an effort to capture a share of the world's largest auto market. Nearly 1,000 models will be on display at the show, with 89 making their global debut.
U.S. auto giants Ford (F) and General Motors (GM) will have a big presence, as will Volkswagen (VLKAY). The German company's Audi brand is the most popular luxury auto in China, and Volkswagen aims to keep it that way. Mercedes (DDAIF) doesn't plan on letting Audi stay on top, however, as the company also will have a big presence in Beijing. BMW plans a strong showing at the trade show, especially with its ultra-luxury Rolls-Royce division models.
Of course, when it comes to China, it takes more than just a sparkling presence at the auto show to capture market share. GM has long known this, so instead of just leasing floor space, it has announced plans to add 600 dealerships in China this year. That's about a 20% increase over the current number. The additional dealerships would bring the company's network in China to 3,500, up from 2,900 at the end of 2011. To give you a sense of size, consider that GM's U.S. network totals 4,400 dealerships. GM also plans to build additional factories in China, and it's looking to expand its Cadillac luxury brand in the country.
GM is the No.1 foreign automaker when it comes to China sales, followed by Volkswagen. This fact doesn't sit well with Ford, and the company has decided to do something about it. The Detroit icon recently announced plans to build its fifth auto plant in Eastern China as part of a doubling of production capacity and sales outlets in the country by 2015. When the expansion is complete, Ford says, it will be capable of building 1.2 million passenger cars a year in China -- nearly half the number it built last year in North America.
The other member of the so-called Detroit 3 U.S. automakers, Fiat's (FIATY) Chrysler Group, has really been behind the Chinese wave, but that's something it's trying to correct. In fact, the Chrysler brand is using this year's Beijing auto show as something of a coming-out party for its return to the world's largest auto market.
The irony here is that Chrysler's Jeep actually was the first Western brand to go on sale in the People's Republic back in 1985. Unfortunately, Jeep pulled its production out of China in 2006, right when other automakers were beginning to realize the market's potential.
That mistake is being rectified by Fiat-Chrysler CEO Sergio Marchionne, who's eager to get back into the fight for Chinese market share. In fact, the company has already commissioned a Chinese designer to create a new version of the popular Chrysler 300, which will be made specifically for Chinese auto buyers. A prototype, called the Ruyi, is on dispay now at the Beijing auto show.
In Chinese, ruyi means "as one wishes." For Fiat-Chrysler, as well as for nearly every automaker out there, the real wish is to hit it big in China -- and that's precisely what the major automakers are attempting to do.
As of this writing, Jim Woods did not hold a position in any of the aforementioned securities.
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If China isn't out producing Detroit, it will do so soon. We've transferred all of our knowledge of manufacturing to them, so it won't be long before we are buying Chinese cars built on American knowledge.
American workers need to be more modest in their salary and benefits expectations if we want to be competitive with China and build American jobs.
Screw Spanish...got to learn Chinese now so not to offend my new owners.
Trade with China is far from fair!
I feel America can compete on a global market, do to quality and value.
But not under unfair trade policy's that our Government allows!
Sure we're selling T Bonds to the Chinese and they're buying because they know as well as I do that if the U.S. goes under so will the rest of the world. Why don't they pay us back for saving them from the Japanese in WW 2? Forgot about that did you? There's nothing worse than an ingrate....
As soon as the Chinese have some respect for themselves and the Chinese Government's a democracy, and quits treating it's citizens like slaves I'll have some respect for you and the rest of them. You should use the anger you direct at me for using a word and do something to bring about a change for your Chinese brothers. You don't care anymore about the Chinese than I do. You're just a blowhard.
From the 426 Hemi to Fiat...what a joke.
Now they have a Mexican-made fake Hemi...owned by Italian Mobsters LOL
Let's hope that Detroit autos continue to be superior to Chinese ones so that Detroit can keep making money to offset the fact that an increasing portion of the American buying public is realizing what kind of crap Detroit produces in comparison to Japan, South Korea, etc.\
Yes, go ahead and thumbs down my post, but I have been making comparisons between Detroit and Honda for over thirty years and Detroit still has not caught up. My suspected reasons for this start with the UAW.
I wonder if Ford's customer service after the sell is going to as bad in China as it is here in the US. I have four Ford trucks and after trying to deal with their customer service at their 800 number I will never purchase another Ford product! The people at the 800 number just take a memo and do nothing else. They can't even call you back because they don't have phones that they can dial out with. I really don't understand how they can keep selling their cars and trucks.
Without the U.S. the rest of the world would starve. You should have capitalized the "c" in Chinese.
Show a little respect to your homeland.
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