http://www.naias.com/section.asp?sectionID=323
China's Geely Takes On the World
A dark horse tries to win in the nascent Chinese car industry
by Michael J. Dunne (2004-03-29)
Make no mistake about it: China one day plans to manufacture its
own cars for export worldwide, including to the United States and Europe.
But the road the Middle Kingdom takes to get there may be different from
the one mapped out by government officials in Beijing. Ever since
formation of China first automotive joint venture (Shanghai Automotive
Industry Corporation tied up with Volkswagen in 1984) China's strategy
has been for handpicked state enterprises to soak up car making knowledge
from their foreign partners - companies like Volkswagen, Honda, and
General Motors. Today, joint ventures account for 90 percent of car
production in China. Once the Chinese partners have enough know-how and
capital, they would have the option to build cars on their own. That has
been Beijing's view of the way things ought to unfold. But at least one
privately owned car company, Geely Automotive, has a different picture of
the future.
Geely founder and chairman, Li Shufu, is blunt: "Joint
ventures will fade away over time. Just like what happened with
motorcycles. In the future, it will be private Chinese companies that rule
the industry."
This is a bold declaration from the leader of a company that is just five
years old, has little research and development capabilities and was
recently taken to court by Toyota for alleged trademark infringement. Then
again, no one would have believed that Geely could achieve sales
of 80,000 sedans in 2003, capturing four percent of the China market.
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