J.D. Power exec says Chinese are 5 years away from quality autos
07-25-2006, 03:40 PM
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J.D. Power exec says Chinese are 5 years away from quality autos
J.D. Power exec says Chinese are 5 years away from quality autos - - By ALYSHA WEBB | AUTOMOTIVE NEWS - - Source: Autoweek
BEIJING -- Chinese automakers are about five years away from matching the quality ratings of cars sold in the United States, says Jamey Power, executive vice president of international operations for J.D. Power and Associates.
"They realize there is a quality gap (compared to cars in the U.S. market now)," says Power. "But they don't know how to close it."
The Chinese Association of Automobile Manufacturers has partnered with J.D. Power to change that. Jamey Power was here for a one-day seminar co-hosted by the association. Executives from two dozen domestic auto companies attended.
J.D. Power has measured customer satisfaction for vehicles and service in China for six years. "We are trying to help them become aware of what they need to understand to be successful in (western) markets," Power says.
A number of Chinese automakers want to sell cars in the United States. The largest, Chery Automobile Co., originally said it wanted to launch U.S. cars in 2007. But privately, executives say 2009 is more likely.
Zhejiang Geely Automobile Holdings Group aims to start in 2008. Great Wall Motor Co. has not set a date. Nanjing Automobile Group is looking at selling MGs in the United States.
They will rely on U.S. and European suppliers of parts and assembly equipment to meet quality, emission and safety standards.
They already realize they can't compete solely on price in the United States, says Power. They recognize they must compete on what the Chinese call xinjiabi, or value for money.
The current generation of Chinese cars isn't ready for the United States, he says. But the next generation could be.
Chinese automakers know they could harm the perception of all China car brands if they bring a substandard model to the United States, says Power. But he adds: "They don't have to come in with Toyota-like quality. If they come in with the industry average on our surveys, it wouldn't do any harm to their reputation."
"They realize there is a quality gap (compared to cars in the U.S. market now)," says Power. "But they don't know how to close it."
The Chinese Association of Automobile Manufacturers has partnered with J.D. Power to change that. Jamey Power was here for a one-day seminar co-hosted by the association. Executives from two dozen domestic auto companies attended.
J.D. Power has measured customer satisfaction for vehicles and service in China for six years. "We are trying to help them become aware of what they need to understand to be successful in (western) markets," Power says.
A number of Chinese automakers want to sell cars in the United States. The largest, Chery Automobile Co., originally said it wanted to launch U.S. cars in 2007. But privately, executives say 2009 is more likely.
Zhejiang Geely Automobile Holdings Group aims to start in 2008. Great Wall Motor Co. has not set a date. Nanjing Automobile Group is looking at selling MGs in the United States.
They will rely on U.S. and European suppliers of parts and assembly equipment to meet quality, emission and safety standards.
They already realize they can't compete solely on price in the United States, says Power. They recognize they must compete on what the Chinese call xinjiabi, or value for money.
The current generation of Chinese cars isn't ready for the United States, he says. But the next generation could be.
Chinese automakers know they could harm the perception of all China car brands if they bring a substandard model to the United States, says Power. But he adds: "They don't have to come in with Toyota-like quality. If they come in with the industry average on our surveys, it wouldn't do any harm to their reputation."
07-25-2006, 03:49 PM
#3
I don't. I think that given the fact that China has had time to observe what went on in Korea and is already really heavily partnered with a number of European and American manufacturers, it's more a matter of collecting that know-how under a single entity than it is really starting from scratch. Plus, they've set things up in such a way that they can avoid many of the pitfalls the Korean automakers have made in the last decade or so. Five years sounds completely doable to me.
07-25-2006, 03:52 PM
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I dont know. The Koreans could have observed the Japanese and the Japanese could have observed the Americans. But observing only is not enough. To make quality vehicles and acquire good market acceptance takes decades. Plus even if they are quality vehicles, the Made in Chine or the Chinese stamp will hurt them a lot. So are starting below zero, they have to work their way up by proving again and again that the product deserves acceptance. That takes for ever.
07-25-2006, 08:08 PM
#6
Originally Posted by gavriil
I dont know. The Koreans could have observed the Japanese and the Japanese could have observed the Americans. But observing only is not enough. To make quality vehicles and acquire good market acceptance takes decades. Plus even if they are quality vehicles, the Made in Chine or the Chinese stamp will hurt them a lot. So are starting below zero, they have to work their way up by proving again and again that the product deserves acceptance. That takes for ever.
As the Koreans, while they have made huge leaps and bounds, never had the benefit of such close partnerships with major international players like GM, VW, BMW, Honda, etc. This was one of the advantages to China's trade protections that required nearly all cars sold in China to be built in China, thus allowing Chinese factory workers to learn the processes and also allowing the Chinese leadership to see how Western companies do their design work.
07-25-2006, 09:23 PM
#7
hail to the victors
"japanese have craftsmanship, koreans have a relentless work ethic, but chinese don't have either."
this is coming from my chinese friends(engineers) who lived in the mainland for 20 years. they are not optimistic about the future of chinese cars.
this is coming from my chinese friends(engineers) who lived in the mainland for 20 years. they are not optimistic about the future of chinese cars.
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07-25-2006, 09:52 PM
#8
Originally Posted by chungkopi
"japanese have craftsmanship, koreans have a relentless work ethic, but chinese don't have either."
this is coming from my chinese friends(engineers) who lived in the mainland for 20 years. they are not optimistic about the future of chinese cars.
this is coming from my chinese friends(engineers) who lived in the mainland for 20 years. they are not optimistic about the future of chinese cars.
That's just patently untrue. He sounds like he's just jaded.
07-26-2006, 11:25 AM
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Chinese cars may flood the markets and satisfy most Americans, but so do GM cars to a large extent [not as large as GM would like].
The Germans and Japanese will be at the top of the pack for a long time to come.
The Germans and Japanese will be at the top of the pack for a long time to come.
07-26-2006, 11:43 AM
#10
The market is saturated, we really don't need another brand to choose from. And unless the Chinese offer something so special and different that buyers would pay full price for it, which I don't see happening, they'll end up having to discount their cars (and I assume they'll be going in with lower priced cars already) to make a sale. And that is no profitable way to start.
07-26-2006, 01:02 PM
#11
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All I really have to work with is how current Made in China merchandise fares against counterparts made in other countries.
When it comes to electronics/computers, a large percentage of these items (and internal components) are produced in China. While the quality is somewhat questionable at times, they do not seem much worse (if at all) than similar products made in Japan. (With the exception of sneakers, I rarely purchase clothing made in China due to quality. But honestly, it may have more to do with materials than workmanship.)
Back on topic, I think CAAM's timeframe is reasonable and believe they can meet/exceed the quality of makes like Nissan and BMW. However, that does not necessarily translate into sales success. (Lincoln, Cadillac and Buick seem to always rank immediately behind Lexus in the JD Power 5 yr VDS but they also always seem to be struggling in the sales area.)
When it comes to electronics/computers, a large percentage of these items (and internal components) are produced in China. While the quality is somewhat questionable at times, they do not seem much worse (if at all) than similar products made in Japan. (With the exception of sneakers, I rarely purchase clothing made in China due to quality. But honestly, it may have more to do with materials than workmanship.)
Back on topic, I think CAAM's timeframe is reasonable and believe they can meet/exceed the quality of makes like Nissan and BMW. However, that does not necessarily translate into sales success. (Lincoln, Cadillac and Buick seem to always rank immediately behind Lexus in the JD Power 5 yr VDS but they also always seem to be struggling in the sales area.)
07-26-2006, 01:26 PM
#12
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Originally Posted by F23A4
All I really have to work with is how current Made in China merchandise fares against counterparts made in other countries.
When it comes to electronics/computers, a large percentage of these items (and internal components) are produced in China. While the quality is somewhat questionable at times, they do not seem much worse (if at all) than similar products made in Japan. (With the exception of sneakers, I rarely purchase clothing made in China due to quality. But honestly, it may have more to do with materials than workmanship.)
Back on topic, I think CAAM's timeframe is reasonable and believe they can meet/exceed the quality of makes like Nissan and BMW. However, that does not necessarily translate into sales success. (Lincoln, Cadillac and Buick seem to always rank immediately behind Lexus in the JD Power 5 yr VDS but they also always seem to be struggling in the sales area.)
When it comes to electronics/computers, a large percentage of these items (and internal components) are produced in China. While the quality is somewhat questionable at times, they do not seem much worse (if at all) than similar products made in Japan. (With the exception of sneakers, I rarely purchase clothing made in China due to quality. But honestly, it may have more to do with materials than workmanship.)
Back on topic, I think CAAM's timeframe is reasonable and believe they can meet/exceed the quality of makes like Nissan and BMW. However, that does not necessarily translate into sales success. (Lincoln, Cadillac and Buick seem to always rank immediately behind Lexus in the JD Power 5 yr VDS but they also always seem to be struggling in the sales area.)
07-26-2006, 01:27 PM
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heh times have changed, china now produces almost everything we have..... my lcd, mp3 player, cell phone, ram, speakers, printer, and tv were all made in china and they are working fine. Made in china but designed somewhere else. Nevertheless, they work fine so im not complaining
07-26-2006, 02:17 PM
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OEM ^ I think the fact that it is designed outside of china makes a big difference, where are you going to find people in china with the level of skills that PhD's in Mechanical Engineering from America's top schools have?
I think 5 years is optimistic. It takes more than 5 years to build even a small company, let alone a company + auto plants + training + R&D + marketing. And then you need dealers and a reputation.
I think 5 years is optimistic. It takes more than 5 years to build even a small company, let alone a company + auto plants + training + R&D + marketing. And then you need dealers and a reputation.
07-26-2006, 02:21 PM
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I'd say 10 or 12 years. They'll probably need at least 1 or 2 model cycles to work the bugs out.
07-26-2006, 02:28 PM
#16
Originally Posted by Python2121
OEM ^ I think the fact that it is designed outside of china makes a big difference, where are you going to find people in china with the level of skills that PhD's in Mechanical Engineering from America's top schools have?
Originally Posted by Python2121
I think 5 years is optimistic. It takes more than 5 years to build even a small company, let alone a company + auto plants + training + R&D + marketing. And then you need dealers and a reputation.
How did starting a new company and dealers get dragged into this? They are talking purely from a quality standpoint and China already has a number of well established vehicle manufacturers that produce unique products.
07-26-2006, 02:30 PM
#17
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I think if they partnered or outsourced many of the design components, and focused soley on manufacturing, this may be possible. I'm sure they will be dirt cheap, so as long as they are relatively safe with a decent warranty people will buy them.
Price point is so key though. There will be a huge stigma attached to these cars. So some people may have no problem buying a 10k chinese car, but there is no way they would buy a 20k chinese car.
Price point is so key though. There will be a huge stigma attached to these cars. So some people may have no problem buying a 10k chinese car, but there is no way they would buy a 20k chinese car.
07-26-2006, 02:46 PM
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Originally Posted by Python2121
OEM ^ I think the fact that it is designed outside of china makes a big difference, where are you going to find people in china with the level of skills that PhD's in Mechanical Engineering from America's top schools have?
I think 5 years is optimistic. It takes more than 5 years to build even a small company, let alone a company + auto plants + training + R&D + marketing. And then you need dealers and a reputation.
I think 5 years is optimistic. It takes more than 5 years to build even a small company, let alone a company + auto plants + training + R&D + marketing. And then you need dealers and a reputation.
Last edited by oemtsxparts; 07-26-2006 at 02:50 PM.
07-26-2006, 04:26 PM
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Originally Posted by CGTSX2004
Umm...lots of places. China has an immensely strong design and engineering program in its major universities. What makes you think that an American PhD is going to be any more knowledgable than a Chinese PhD?
Originally Posted by CGTSX2004
How did starting a new company and dealers get dragged into this? They are talking purely from a quality standpoint and China already has a number of well established vehicle manufacturers that produce unique products.Last edited by Python2121; 07-26-2006 at 04:28 PM.
07-26-2006, 04:27 PM
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Originally Posted by oemtsxparts
lol.... what's funny is all the high schools and colleges around my area have chinese valedictorian every friggin single year. but sometimes the koreans and the vietnamese beat them
All people are created equal
07-26-2006, 04:44 PM
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Originally Posted by Python2121
OEM ^ I think the fact that it is designed outside of china makes a big difference, where are you going to find people in china with the level of skills that PhD's in Mechanical Engineering from America's top schools have?
07-26-2006, 06:19 PM
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Originally Posted by F-C
Umm, they might find them in America? Walk into the halls of America's top engineering schools and you'll find most PhD students are foreigners, many from China. With GM and Ford becomming smaller, they might just move back to China to work for Shanghai Automotive or Chery.
07-27-2006, 08:54 AM
#24
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Some statistics from the Immigration Policy Center:
Engineering students studying in US universities:
15% of BSE students are foreigners
30% of Masters students are foreigners
50%+ of Doctorate students are foreigners
Of those foreign students, 15.8% are from China, by far the largest group. Many have trouble finding work after getting their degrees because of visa requirements. I would guess a lot of them would move back to China to work for Chinese companies. It's all part of a large brain drain of engineering and science people AWAY from the US. Unless the US changes its visa requirements for advanced degree professionals, a lot of talented people trained in the best schools in the US will leave the country.
Engineering students studying in US universities:
15% of BSE students are foreigners
30% of Masters students are foreigners
50%+ of Doctorate students are foreigners
Of those foreign students, 15.8% are from China, by far the largest group. Many have trouble finding work after getting their degrees because of visa requirements. I would guess a lot of them would move back to China to work for Chinese companies. It's all part of a large brain drain of engineering and science people AWAY from the US. Unless the US changes its visa requirements for advanced degree professionals, a lot of talented people trained in the best schools in the US will leave the country.
07-27-2006, 09:12 AM
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I totally agree, with what I have read and heard from people 1st hand. Chinese automotive maker Chery has some nice cars they could bring into the US. Will they bring them in? Or will they flood the market with cheap POS. We'll find out soon!
07-27-2006, 02:23 PM
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i think china's weakness is not their academics but they're too peaceful like a panda. they need to have more belligerent killers and thieves like the us, europe, and japan to make them want to colonize other nations, steal their natural resources and enslave their people to become more powerful.
07-27-2006, 02:31 PM
#27
Originally Posted by oemtsxparts
i think china's weakness is not their academics but they're too peaceful like a panda. they need to have more belligerent killers and thieves like the us, europe, and japan to make them want to colonize other nations, steal their natural resources and enslave their people to become more powerful.
07-27-2006, 03:09 PM
#28
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