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| China on a roll |
By:
Tom Watkins |
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China is on a roll, and its homegrown brands will soon be rolling our way. Michigan needs to be prepared.
The recent Beijing auto show opened with an unprecedented number of Chinese makes and models. This is an amazing accomplishment when you consider private ownership of cars was not even permitted until the 1990s. When I first traveled to China in 1989, the dominant means of transportation for the 1.3 billion people was the "Flying Pigeon" bicycle.
Today, China is the world's third largest auto market. The production and sales of automobiles in China are expected to surpass 7 million units this year, according to the China Association of Automobile Manufactures. That would more than triple the number produced as recently as 2003.
Consider:
• By 2020, there are expected to be seven times more cars on China's roads than in 2004.
• General Motors Corp. expects the Chinese automobile market to be bigger than the U.S. market in 10 years, and some expect that to happen even sooner.
• The Chinese middle class, virtually nonexistent a quarter of a century ago, now tops 100 million people and is growing.
Geely, a relatively minor player in the China auto industry, made a major splash last year in Detroit by being the first China car company to show a vehicle at the North American International Auto Show. Geely recently inked a deal with a company in the United Kingdom to make London's iconic black cabs in China. Geely also had more than a dozen new models on display at the Beijing show.
While Geely may not be the first Chinese car company to penetrate the U.S. market, you can bet that just like the Germans, Japanese and Koreans, China will have a vehicle on our roads in the near future.
While automakers from the United States and elsewhere have been scrambling for the opportunity to enter into joint operating agreements with the Chinese to grab a part of the fastest growing auto market, the Chinese have been working on their own plans to build a car capable of penetrating the global market.
Both DaimlerChrysler and GM have openly talked about exporting a Chinese-made car to the United States in the near future. The recently appointed Ford CEO, Alan Mulally, has extensive guanxi or relationships with Chinese government and business leaders from his days at Boeing Co.
Why are the "Detroit Three" in China? Because that is where the growth and profits are. GM's China sales jumped 36.7% in the first three quarters of this year and the company intends to keep investing in China's fast-growing market, says chairman Rick Wagoner.
Yet, be very clear, while China is partnering and entering joint ventures today with foreign automakers, its goal is to produce, market and distribute a China brand that will stand on its own on the world stage.
Clearly, the China economic muscle car is coming and we have two choices: Do nothing and get run over or shift into high gear and seek ways to win the race. Like Toyota and other Japanese firms, the Chinese know that Detroit is the intellectual auto capital of the world, and we need to create a hospitable place for Chinese investment.
• Michigan needs an Asia/China economic plan that taps the best and brightest business, labor and academic minds to find ways to make China's rise work for us. Other states and nations are ahead of us in this race.
• The various China spokes in their infancy here must be connected. They have been developed primarily by Automation Alley under the leadership of Oakland County Executive L. Brooks Patterson and Wayne County Executive Robert Ficano. Both are filling a vacuum left by the inaction at the state level.
• Quit whining about outsourcing and make plans to capture the insourcing that is beginning to develop as the Chinese are looking for places to invest in America.
• Make Michigan the first state in the nation where Mandarin Chinese (the most spoken language in the world) along with Chinese history and culture are taught in public schools. This will help prepare our children for the future and make Michigan a magnet for future Chinese investment.
Unlike a Chinese fortune cookie, we are responsible for creating our own future.
TOM WATKINS is a business and education consultant. He served as Michigan's State superintendent of schools 2001-2005. Write him at tdwatkins@aol.com |
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