When I first visited China 26 years ago, I saw more water buffalo than cars. Today, traffic jams in major cities look like an L.A. freeway during rush hour.
With such a booming car market, you’d think that Chinese auto manufacturers would be making a killing. Instead, they’re losing ground against foreign brands even though they’re much more expensive than domestic models.
According to a recent story in the New York Times, most Chinese drivers own foreign cars. Cars and light trucks made by Chinese companies accounted for only 45.1 percent of the market last year. If you don’t count stripped-down pickup trucks and minivans, the percentage was only 29.5.
The trend is glaring at my university. Almost all the Chinese teachers I know drive U.S., Japanese, Korean or German cars. I only know one who has a Chinese car.
Meanwhile, American automobiles are soaring in popularity. According to the Times, Ford has almost doubled its market share in China to 4.5 percent in the last two years. Ford, which operates two assembly plants in Chongqing, plans to double its production over the next year, the Times said.
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There’s a simple explanation for the popularity of foreign cars in China: Buyers think they are more stylish, reliable and safer than those manufactured by Chinese companies.
Ford, like all other foreign automakers, can only manufacture vehicles in China through a 50-50 joint venture with domestic partners. So, even though the streets are filled with Fords, Volkswagens, Hondas, Kias and BMWs, some Chinese companies are making a bundle from the influx of foreign cars.
Still, Chinese automakers have failed to break into the lucrative U.S. market. For years, there’s been talk that the Chinese would follow the pattern established by Japanese and Korean carmakers: start out by undercutting competitors with cheaper prices, build a base of customers and then gradually improve the product to meet Western standards. But so far, the Chinese have failed to make a car that would appeal to American drivers.
China may be the world’s top manufacturer, but when it comes to cars, it’s not in the driver’s seat.
