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Magna
China
Keith Lomason – Executive Director, Business
Development Magna International, China
What social/economic/technological/political trends do you think
will have the greatest impact on car design in China in 2018?
Obviously, environmental factors are driving changes to the propulsion
systems of the automobile, and this will be no exception in China. With
alternative power sources comes a need for lighter weight materials as
well, so these two trends will be coupled together for at least the next
decade.
What will be the state of the Chinese industry in 2018?
Very probably the China auto industry will be the largest and
most influential in the world. While China will probably have more manufacturers
than any other country, it will be a fraction of what it is today. Assuming
all of the foreign OEMs that are here today survive in China and globally
until 2018, there will probably be 10 Chinese OEMs that are in the global
auto arena. The industry will be strong, and by 2018 should be leading
the world in exports and certain technologies - emission control, perhaps
battery development and certainly in mass transit.
In what ways will the technology differ from today?
China could end up leading the fields of emission control, alternative
propulsion systems and mass transit. This is due to the critical mass
of the PRC market making it both an attractive arena for manufacturing
and sales and with that, potentially the most polluting market in the
world - something I believe neither China’s government or its citizens
will tolerate.
How will Chinese OEMs develop?
There are three distinct paths being followed today: partnership
with a foreign OEM; acquiring overseas companies and/or their rights to
vehicles or major systems; and growing internally with support purchased
from the global supply base.
Partnerships with foreign OEMs have not given the Chinese partners everything
they were expecting or hoping for, and it is unsure if or for how long
the partnership requirement will be in force for foreign OEMs. In most
cases, the forced partnership is not what the foreign partner sees as
an optimum relationship, and if the rules change there will probably be
several separations.
This will not happen, however, at least until several Chinese OEMs have
firmly established themselves as legitimate global players. SAIC, Nanjing
Auto and FAW, in addition to having their foreign partnerships are also
following a path of acquiring overseas companies and/or the rights to
manufacture certain products. This approach will see some success, but
will also be subject to the same disappointments that the OEM joint ventures
have experienced – technology will be slower to be absorbed than
many of the Chinese partners will have wanted because it will not have
been internally developed. Chery, Geely, and a handful of other non-partnered
OEMs are growing their expertise internally, and supporting their shortcomings
with technology, product and systems purchases from competent global Tier-1
suppliers. Although this may seem like the longest way to go, with technology
shortening the learning curve dramatically this may end up being the shortest
route to true independent capabilities for a PRC OEM. Short term suffering
in lack of technologically advanced designs or integration will eventually
become long term gain on having home-grown knowledge that has been exposed
to a globally competitive market.
Next...
Magneti Marelli
Index
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January 2008
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