Pongezi kwao but I would rather go for Nissan leaf which is Japanese based technology than Chinese technology .
Usipende kukalili mkuu shughulisha ubongo wako,karne hii niusawa mwingine kabisa,
Wasikilize watuwenye akilizao duniani wanazungumza nini kuhusu china
Don't Underestimate Chinese Automakers
Willy ShihContributor
ManufacturingI teach at Harvard Business School, and I write about manufacturing
I am a professor at Harvard Business School. I co-authored (with Gary Pisano) the book, “Producing Prosperity: Why America Needs a Manufacturing Renaissance,” and have written numerous articles on manufacturing in Harvard Business Review, MIT Sloan Management Review
The recent talk about a trade war engulfing the automobile sector has focused attention on the German makers, especially BMW and Daimler, who have large factories in the United States and export to markets around the world, especially China. The U.S. imports very few cars from China, only the Buick Envision, Cadillac CT-6 hybrid, and Volvo S60 as far as I know, and these are on nobody’s radar.
Non-auto geeks in the U.S. are probably largely unaware of what is going on in China in automaking. Having visited a number of Chinese automakers over the past few years, as well as American, European, and Japanese makers both in China and elsewhere, I thought it might be useful to catalog some observations.
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. 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. The industrial progress in such a short time is remarkable.
Leaders are starting to emerge in a fragmented market
There were hundreds of automakers in the U.S. during the 1890s and early 1900s, but by the 1920s General Motors, Ford, and Chrysler emerged as dominant players as the industry went through a period of consolidation. Several years ago, I visited the Shanghai Auto Show, and there were hundreds of makers displaying their wares. It was quite interesting, you could tell at the time that some of the firms were starting to figure out the marketing part of the equation, while many were still in a “just copy what others did at the Detroit Auto Show.” While we haven’t seen a wholesale consolidation in China yet, some leaders are starting to emerge: Geely, Changan Automobile Group, Dongfeng Motor, BYD Company, Beijing Automotive Industry Group, and a handful of others. What distinguishes them is an ability to sell under their own brand, beyond just making and selling joint-venture produced foreign nameplates.
The Chinese market has the largest scale in the world – this has implications
We sold 17.2 million new vehicles in the U.S. in 2017, of which approximately 11.2 million were produced inside the country; the balance was imported. Chinese market sales reached approximately 29 million units in 2017 on a production base that was about the same. So while sales in China were 1.7X higher than the U.S., actual production was more than 2.5X higher. That means Chinese manufacturers are
getting a lot of practice, and moving down the learning curve. Parts makers, including global firms like Continental and Valeo, find China to be the most attractive market for volume. That means China is today a low cost source for parts, and is likely to get better. That has significant long term implications for making cars in the U.S.
China intends to lead the world in new energy vehicles
In the U.S. the press attention for electric vehicles is focused on Tesla. In China, there are some large electric vehicle manufacturers like BYD, but also a raft of start-ups like Shanghai-based NIO, backed by TenCent and Baidu. The Chinese government has granted special manufacturing permits to companies who make “new energy vehicles, and who are generally outside the traditional car making industry. This is to encourage start-ups. The government has also been generous with research and development grants and consumer subsidies, and exempted new energy cars from the severe licensing restrictions required to own a conventional internal combustion vehicle. What that means is the fastest way to get a license plate in some of the large congested cities like Beijing is to buy an electric vehicle.
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. It has invested heavily in scaling up battery manufacturing, and it intended to be the world leader in new energy vehicle manufacturing. BMW recently announced plans to source batteries from Contemporary Amperx Technology Ltd. (CATL), and Volkswagen is focusing its electric vehicle development in China. Tesla just announced plans for a new factory in China that will produce 500,000 vehicles a year.
Chinese automakers and parts suppliers will harness the Internet in ways that haven’t been imagined in the rest of the world
Two years ago I brought an HBS Class to Shanghai for two weeks, and we put student teams into projects at a number of Chinese companies, including several Internet startups. 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. 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. We visited an automaker that offers a built-in WiFi hotspot with lifetime provisioning included. 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.
What does this all suggest?
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.
