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Chinese Auto Makers Ready for Global Supremacy

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GAME ON
DailyFeed
In the 20th century, we saw how Japanese and Korean automakers like Toyota (TM), Honda (HMC) and Hyundai, benefiting from their countries’ infant industry protection laws, rose to become globally top-selling brands. Though it has taken it a bit more time, China, too, is now ready to get in the auto market.
 
According to Die Welt (with a translation by Worldcrunch), Chinese entrepreneurs, backed by billions in government subsidies, will soon launch up to five new giant auto firms that will produce originally-designed and –engineered vehicles (so no more copying for them ostensibly) that would pose a threat to the likes of General Motors (GM) and Ford (F).

Chery, one of China’s top automakers, plans to roll out “cars to Western standards” and will introduce three versions of its Qoros brand vehicles to the international market in 2012.
 
Another competitor, BYD, a green car maker that Warren Buffett put $230 million in, has already launched a branch in Los Angeles.
 
The Chinese government is spurring the development of the state’s auto industry by pushing local firms to merge and form larger entities that will have the capability to acquire European, American or Japanese companies. As Die Welt notes, MG Rover and Volvo have both been gobbled up by Chinese firms.
 
Indeed, European car companies have recognized the impending challenge posed by China’s fledging auto industry, with Daimler head, Dieter Zetsche, telling Die Welt that “"Just the way the Japanese and the Koreans did, the Chinese will become globally competitive."
 
Porsche CEO Matthias Müller added that he thought China could be a net exporter of cars in less than 10 years.
 
Despite the possible threat of Chinese automakers, China is still seen very much as a land of opportunity for car makers worldwide. Volkswagen, for example, is projected to move over 2 million units this year and GM is targeting annual sales of 5 million by 2015.
POSITION:  No positions in stocks mentioned.
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