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Wednesday, December 16, 2009

Emerging Automakers: Pt. 2 of 4

Exactly how are Chinese Automakers able to get away with this?

In a nutshell, they aren't.

Despite Warren Buffett's investments, there's yet to be a Chinese Automaker introduced to North America. Naturally, then, I cannot make an assessment based on first hand experience. Thank goodness for Google!

According to, who sourced their article from, the total number of sales that Chinese Automakers made in Europe for the fiscal year of 2009 is 745. Seven hundred and forty five. Can anyone suggest a word even stronger than "abysmal"?

One car in particular generated a bit of publicity in its stint there. Behold the car in orange, the Great Wall Peri. The car in green is the FIAT Panda. Take a look at everything after the A-pillar, ending at the rear doors.

It's very subtle at first, and arguably I'd say that Great Wall executed a more attractive design than FIAT did. Nevertheless, the cloning is visible. For that reason, FIAT filed a patent dispute over Peri's exterior design, leading to a ban on Peri sales across Europe.

::for more on that ^, click here::

Regardless, despite pathetic sales numbers, and Great Wall being one of the many companies that are facing patent infringement, there are yet to be any signs that Chinese companies have learned to respect other company's development and to establish their individualism, as well as doing what they can for quality, safety and performance.

But this doesn't matter. And I'll tell you why. The growing economy within China is already more than enough to fuel their growth. For many of China's start-up car companies, there's no need to think globally yet. Within the borders, it's what I'd like to call the wild west of business ethics. Anything goes. As long as the products are made by the Chinese, inside the Chinese borders, and generating funds for the Chinese economy, their government will lend a blind eye to unethical business practices. Have a look at the whole tainted milk fiasco, the head of China's State Food and Drug Administration taking bribes from pharmaceutical firms and all.

As a matter of fact, just 3, THREE, out of more than forty five Chinese companies plus however many companies import their cars to China, already make up 48.7% of the entire Chinese domestic market.

It is difficult to fathom exactly how much money that equates to for those three companies, but I suspect that since labor is cheap and it is apparent that their business practice is to cut corners, their margin of profit per vehicle is not small. Each year, their sales will increase exponentially as well. No reason for them to be worried then.

Arguably, though, money should not be the end all of their ambitions. They're a corporation, not a single person, of course. So, I leave you with another question.

What are the future goals of the Chinese automakers?

-Danny Choy-

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