The Future is Chinese

Mention ‘Chinese car’ to a Singaporean and chances are, you’ll get a reaction of mockery and disgust. It’s true that when Chinese cars were last offered here, they didn’t exactly cover themselves with glory, with their poor quality and image of ‘cheapness’ that came associated with their low purchase price. It was the very definition of ‘you get what you pay for’, in that you pretty much got nothing for your money except for four wheels and a measly engine.

But over a decade on, is that still the case? We take a look at why Chinese cars may not be the same heap of junk you remember, and could in fact be a car you could realistically own, and even aspire to have, in the near future.

One of the things that Chinese carmakers were notorious for was their ‘similarities’ to their Western and Asian counterparts. Some of them were licensed copies (the Chery A15 was a reworked first generation SEAT Toledo, for example), but many were simply, shall we say, pirated, in much the same way the Chinese would produce knockoff versions of branded clothes and accessories.

The infamous Chery QQ was effectively a carbon copy of a Chevrolet Spark, and that was just the tip of the iceberg. In the early infancy days of the Chinese automotive industry during the early to mid 2000s, there were hundreds of copycats being produced, much to the chagrin of the established carmakers who were understandably upset that their intellectual property rights have been infringed.

Legal action proved fruitless, as the Chinese courts would side with the local carmakers (“Similarities, what similarities? They’re not the same at all! Nothing to see here, move along…”). But all that could be about to change however. In a recent landmark decision, a Beijing court ruled in favour of Land Rover, who had sued Chinese carmaker Jiangling Motors Corporation over their copy of the Range Rover Evoque. The court ordered Jiangling to halt production and sales of their Landwind X7, having determined that the X7 was substantially similar to the Evoque, and ordered Jiangling to pay Land Rover damages for the infringement.

Such a decision could prove to be a milestone for the Chinese automotive industry, as it could compel them to move away from copycat designs, and force them to develop innovations of their own. In the fast maturing Chinese market, such knockoffs already have a bad reputation among the buying public for their lack of originality, so it would seem like the days of the copycats would be very much numbered.

China is already the biggest car market in the world, and its growth has been exponential. From 2009 to 2017, new passenger car sales in China exploded from 10.3 million to 24.7 million. That’s nearly a 150% growth in less than a decade. And while 2018 saw a contraction for the first time in two decades, thanks to Donald Trump’s trade tariffs slowing the economy in general, the numbers are still significant. Make no mistake, the Chinese have a relentless thirst for new cars.

This means that there are plenty of incentives for companies to jostle in for a piece of this profitable pie. And in a highly competitive market, it’s not enough to simply hustle up a cheap machine with just the bare essentials. That may work in the rural countryside, but certainly not in the fast maturing developed cities, where an established population class have been exposed to the best of the Western and Asian worlds, and expect nothing but the best for their money.

Most foreign carmakers who want to do business in China have to establish joint ventures with local companies in order to have access to local production facilities (which brings with it the benefits of no import taxes). So you’ll see nameplates like Changan-Ford, Dongfeng-Nissan and FAW-Volkswagen, to name but a few. These local companies are often carmakers themselves, and so there will be the inevitable technology transfer when collaborating with their partners.

The smarter companies have been wise to learn from their foreign counterparts, and used what they’ve learnt into producing their own cars. Take for example the Changan Raeton CC, a stylish, Volkswagen Passat-sized sedan that includes tech such as adaptive cruise control, lane departure warning, and brake assist, features which are only now becoming commonplace in European cars.

Perhaps the most prominent example has to be Geely, which has grown into a bonafide world player in the automotive sphere. Go onto their global website and you’ll be greeted by their Emgrand GT model, a large executive sedan that boasts luxurious features and top-notch quality, and has been designed by none other than Peter Horbury, he of Volvo fame. It is certainly a far cry from Geely’s early models that couldn’t hold a candle to the Koreans when they started out. Today, Geely is the owner of storied brands like Volvo, Lotus, and even our neighbours Proton, and they have done a good job with those brands, letting them retain their core essence while at the same time absorbing their vast experiences and best practices to help improve the Chinese operations.

Perhaps more important and relevant to us all, is the fact that China is now also the world’s largest electric vehicle (EV) market, with more than half the world’s EVs globally sold in the country, thanks to huge government incentives that encourage the adoption of low emissions vehicles. As a result, China is leading the way in EV development, and while it is still at an early stage, eventually we will reach a point where we will reach the apex, and inevitably it will be the Chinese that will offer the best products given their massive head start in this area. Even Tesla are looking to set up a factory in Shanghai now, such is the market’s appeal and potential. It is most definitely where the money is, especially if you are in the business of producing and selling ‘New Energy’ vehicles (as is the Chinese term for non-combustion cars).

It wouldn’t be a far stretch to say that within the next decade or so, the automotive industry would be significantly disrupted by the Chinese. They have now taken the lead in many areas, including design, engineering and development, and like it or not, they are ready to take on the world.

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