Detroit's big showing at Beijing's auto show

Even Chrysler is making moves to get a piece of China's market.

By InvestorPlace Apr 24, 2012 9:52AM

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.

 

Related Articles

VIDEO ON MSN MONEY

32Comments
Apr 25, 2012 9:25AM
avatar
Sure they want a piece of the action, whats wrong with this picture, China is not for us, they'll use what ever means against our country, and the auto makers want to make more money. Its call selling us out! Wake up America, while we still can!
Apr 25, 2012 10:48AM
avatar

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.

Apr 25, 2012 5:41AM
avatar

Screw Spanish...got to learn Chinese now so not to offend my new owners.

Apr 25, 2012 10:46AM
avatar
Sure the Chinese are allowing an automobile trade show there.   I'm sure they'll try to copy and pirate the automakers ideas like they're notorious for.
Apr 25, 2012 11:15AM
avatar
We should give China the same trade policy they give us!
 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!

Apr 24, 2012 1:56PM
avatar
I thought by the headline we had sold Detroit to China.  I was wondering how much we got.
Apr 25, 2012 3:28AM
avatar

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.

Apr 25, 2012 5:43AM
avatar
They love their Buicks...great job GM...Even Shaq likes them.
Apr 25, 2012 10:53AM
avatar
And now do you understand where all the oil is going?
Apr 25, 2012 5:39AM
avatar

From the 426 Hemi to Fiat...what a joke.

Now they have a Mexican-made fake Hemi...owned by Italian Mobsters  LOL

Apr 25, 2012 11:07AM
avatar
And America just stands by and wonders,"What happened?"
Apr 24, 2012 2:43PM
avatar
Right. I thought they had bought Detroit. A couple million welfare mothers is just what they deserve.
Apr 24, 2012 1:06PM
avatar
ah another market for americans to kinda get intoSmile
Apr 25, 2012 11:44AM
avatar
And China will have cheap copies of everything there within the month.


Apr 25, 2012 11:01AM
avatar

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.

Apr 25, 2012 10:52AM
avatar

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.

 

 

Apr 25, 2012 12:20PM
avatar
I was just wondering how all of these cars are being sold to people making slave wages over in China?
Apr 25, 2012 12:54PM
avatar
The USA is looking very similar to Great Britain circa 1875-1925.  As the British empire crumbled, those who had taken all the money pumped it into American ventures.  And guess what... it not only ruined all of British manufacturing, but created the country that was America 30 years ago. Truth be told, if truly want to get ahead, you should move to China and take advantage of the corporate money being dumped into that nations coffers.
Apr 24, 2012 3:37PM
avatar

Vince Tee

 

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.

Apr 25, 2012 1:56PM
avatar
One of the reasons America is going down the tubes is that it blames everyone else for our mistakes, including the Chinese. And on top of it, we have fellow Americans speaking out in unintelligent, racist ways.  
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes
[BRIEFING.COM] S&P futures vs fair value: +1.00. Nasdaq futures vs fair value: -1.00. Nasdaq at... NYSE Adv/Dec 0/0... Nasdaq Adv/Dec 0/0.

Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.