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Would You Buy A Chinese Car?

By Dan Harris on Posted in China Business

A couple years ago, I went to China with my wife and youngest daughter. We landed at Pudong and were waiting for a cab. A well-dressed Chinese woman who was one or two people ahead of us in the taxi line came over to and asked us if we wanted to switch cabs with her.

At first I was non-plussed, but then I realized what was happening. Her cab was a Chinese car and ours was a Volkswagan.  

I then asked her why she wanted to make the switch and after much hemming and hawing, she confessed that she would be going on a long trip and she did not want that particular car (note how she never said exactly why). I kept pressing her for more of an explanation and she never gave it and I refused the switch.

I can remember one hot summer in Beijing (is that redundant?) when I would wait for the VW cabs because the odds of their having a fully functioning air conditioner was so much higher.

In my January, 2011, trip to Beijing and Shanghai, I noticed how few Chinese cars were on the road and how most of the cabs were now Volkswagan. I spent three weeks in Vietnam in December and I do not remember seeing a single Chinese car. In Vietnam, Shanghai and Beijing, car taxes are extremely high and I think those who can afford to pay them are generally not interested in Chinese cars. 

I thought of all this today after reading a post on China Real Time Report, entitled, “Volvo: Swedish Company With Chinese Characteristics.” Is Volvo still a Swedish company, in terms of its culture? Is Volvo still viewed as a Swedish company? What will happen if Volvo begins to be widely perceived as a Chinese company? Does Lenovo provide any clue to Volvo’s future? Does Hyundai? Does Jaguar?

What do you think? 

On a somewhat related note, Shanghaiist has out the best article I have seen on the incredibly stupid Groupon Super-Bowl ad, which does provide at least a bit of fodder for asking whether China will buy American?  

  • http://chinabizgov.blogspot.com G.E. Anderson

    Chinese auto brands have a well-deserved reputation for poor quality, but they are closing the quality gap with foreign brands amazingly fast. In some cases they have nearly caught up. For example, Shanghai Auto’s Roewe and MG brands have improved greatly in recent years based on Shanghai’s learnings from their partners GM and VW.
    Also, keep in mind that those VW cabs in Shanghai and Hyundai cabs in Beijing are all assembled in China by Chinese workers.
    My sense is that Chinese perceptions of quality haven’t quite caught up with reality yet. And I certainly wouldn’t discount the snob factor of a small sliver of China’s upper middle class — to which I would guess the woman you encountered belongs. These are also people who have more money than sense and would travel to Hong Kong and stand in line for hours, all for the privilege of being gouged on a Louis Vuitton handbag. (http://biglychee.com/blog/2011/02/07/an-auspicious-start/) :)

  • Aaron

    There are always some Chinese who thinks foreign brand is better, and it’s mostly a status symbol thing. (Similarly, some Americans prefer European brand cars for the same reason).
    And there have not been many quality related PR issues in China for foreign companies. But over time, that might change as well. (There have already been several incidents of deaths relating to US/Japan made cellphones exploding).
    -
    Groupon is definitely stupid in more than 1 way. (In at least managing to tick off both the Tibetan exiles and the Chinese, that’s no small feat of stupidity.)
    It only reinforce the Chinese view that US companies are at least in part attempts by the Westerners to “interfere” with Chinese domestic political issues.
    But it is funny that two groups see Groupon’s message as completely different and completely insulting both ways.
    (1) the Tibetans see Groupon saying, “We want to profit from your political cause.”
    (2) the Chinese see Groupon saying, “We want to bring our political cause in with your savings.”
    … And at a Superbowl? Only worse if that Ad was made into giant billboards and put up in Reno (no offense to Reno, but just wrong type of venue for the wrong audience).
    Groupon wishes and Fish curry dreams….

  • http://www.pbl.com David

    I agree with the G.E. Anderson comment above. The VWs and Buicks etc. are all made in China, anyway, so it generally falls under the whole “Chinese/Asian brand fascination” aegis. But in January 2011, my interest was piqued by how many new Korean cars (especially KIAs) are now on the roads in Beijing and Shanghai–I saw many fewer just a year ago. Also, Lexus has managed to become a more popular luxury brand.
    Everyone in Beijing is unhappy with the laws that “ration the right to be on the roads” (depending on the license plate number, a car can’t be driven in Beijing on certain weekdays), which are somewhat egalitarian–the license plates are read by hidden cameras (and violation tickets are then immediately issued) automatically, as a minister had complained to me. As a result, the traffic in Beijing is only very slightly better on weekdays, but now on Sundays (when all cars are allowed on the road, so that’s where they all are) it is unbelievable now, too.
    Favorite Chinese new car story–as Beijing had passed a new law that forbade a family from owning more than one car (it became effective 1/1/2011,) end of year car sales were (to say the least) booming in Beijing, as wealthy folks wanted to be “grandfathered” with a nice new second vehicle. Local Merecedes dealerships allegedly had run out of inventory sometime in early November, so as people came by the dealerships, and were told there were no more cars available, some of them approached the cars in the showrooms, smashed the windows, and told the dealerships “well, it’s my car now! Let me buy it and repair it!” This was broadcast all over China.

  • nulle

    Until the NTSB and NISA (or their European equivalents) certify that Chinese cars are comparable to European, American, Korean, or Japanese cars. I would avoid Chinese cars like the plague, even if I am in China.
    Chinese quality is still much inferior compared to other cars, chinese cars are comparable to indian cars…actually given Volvo, Roewe and MG are now Chinese- owned, I would avoid buying their cars, period, given the shenanigans the Northern-Chinese are capable of pulling with their shanzai products and lack of conscience.

  • Aaron

    China has taken the European approach in curbing growth of automobiles on the road, increasing the fees for licenses/etc.
    Sooner or later, the Chinese people who can afford a car will realize that it is more hassle than it is worth.

  • William

    I wouldn’t buy a Chinese car today, but I expect they’ll be at an acceptable level of quality in 20 years or so. I’m not afraid to ride in one when I’m in China–I probably should be, since they tend not to meet American or European safety standards, and the rear safety belts tend to be disabled for my convenience.

  • http://www.carsguide.com.au/ carsguide

    They are kinda cheaper though, but you also don’t want to fix it everyday.

  • http://www.themiddlekingdom.org Matt

    I got my Chinese driver’s license last summer, but don’t have a car here. I’ve since borrowed two vehicles from friends while they were away (both Great Wall-brand Toyota knock-offs, different models), I’ve also spent a good amount of time in a Chery QQ. I would definitely not buy a Great Wall vehicle (the price point is really low though), the electronics in both were screwy and the transmission is really clunky and one of them doesn’t have power steering when the weather is cold. The Chery QQ must win the award for most-likely-to-get-you-killed-in-accident, and I wouldn’t want to take that thing on many trips out of the city on an expressway, but for city driving, the tiny footprint makes it fairly useful, so I might consider it.

  • Aric

    Was the woman’s taxi dark red? It may not have been about the car, but about the taxi company. Most taxi companies in Shanghai are trustworthy, but there are a few who will overcharge you, either by taking the long route or by an inaccurate meter.
    The light blue colored taxis are Da Zhong, and usually have the best cars and drivers. Other good colors are white, yellow, light green, and the new taxis that look like mini-SUVs (these new ones are also very comfortable). The colors to avoid are dark red and dark blue. There is another blue cab company that is good, called Hai Bo. Light red taxis with white trim should also be good.

  • Serge Adam

    This article displays an odd reasoning as to what it means to make something Chinese. VW in China is a Chinese company. The majority shareholder is Chinese. And most of the component parts are manufactured in China. The only thing that isn’t Chinese is the brand. Because that leaves VW with the bill of maintaining their brand awareness, which the Chinese get for free.
    And you think US made cars are American? 50% of the parts come from China. “As American as Apple Pie” is becoming “As American as Wonton Soup.”

  • http://www.internationalpatentservice.com/ CA

    Several Chinese car companies are displaying new models at the Auto Show in Detroit – one is an SUV that they say will sell for only $ 14,000. Industry observers predict that cars made in China are set to go on sale in the U.S. within months.

  • nulle

    in response to Serge Adam, these days every brand of cars have models or entire car either assembled in the US. I have zero illusion of that. what I watch in terms of buying the car is (a) where the parts comes from (b) where the car is assembled.
    I don’t care if the chinese car is about 14k. It HAS TO PASS safety and reliability tests in order to qualify. I wouldn’t go anywhere near one until then. I heard about GM bringing cars from China (they already bought Korean made and design cars into the US)
    Speaking of driving in China, either there are no rules, or the rules are NOT enforced or ignored…makes driving a hazard and you drive at your own risk…the rule of law doesn’t exist in China (since you can run over two people and don’t get life in prison if you work for the gov’t or rich enough to buy off people.)
    given all the shanzai (fake/adulterated) products in China and the chinese propensity to lie/fudge to see what they can get away with (to make a yuan at whatever costs. “I don’t care if the [add product] poisons/kills people, as long as my family doesn’t use/consume that product.” People in China doesn’t think twice before substituting industrial versions of the bleach/coloring from their food equivalent to save on costs….
    list of fake/adulterated CHINESE products below:
    brake parts, soy sauce[human hair as textured protein base],
    milk/milk powder[melamine], eggs[plastic], fish [malarite green],
    pet food [melamine], beauty products[mercury and/or heavy metals],
    preserved vegetables in tetrapaks/cans[heavy metals, Dioxin],
    cooking oil [recycled from spent oil from sewers],
    shampoo/conditioners[carcinogeons, Jacky Chan as spokesperson],
    toothpaste[antifreeze/ether-glycol sold in dollar stores in LA],
    chinese pork buns [cardboard], mobile phone batteries [explodes],
    toys[heavy metals], plates/glass cups[lead paint; McDonalds]
    mooncakes [recycled from prev years], tea [recycled from spent tea]
    be wary about ANY Chinese products, remember “you get what you paid for”

  • http://www.puddingandchopsticks.com Homer

    Buying a Chinese designed and built car from the ground up, well, it’s going to be a while before I jump on that train. I just can’t not think of the things that come out of Chinese factories, what I’ve seen workers do, try to get away with. And then I have to feel comfortable in buying a car from one. No sir.
    With anything they are going to have to prove themselves. If they can do that, then maybe I’ll think about it. Until then, I got my eyes on a nice Audi. Need me some face. Haha.

  • Dan (another Dan)

    lol, @nulle,
    I think out of that entire list, from what I could remember, the cardboard box steam pork buns was an hoax. Same with the fake eggs and soy sauce. Not recently with fake rice. However, other than those few items, almost everything else is sort of true.
    Fake food products are very noticeable if they are “truly” made with industrial chemicals. Most industrial chemicals are made from petroleum and other minerals. If those food products were really made from industrial chemicals, two things might happen if anyone attempts to cook them. One, it becomes very hard, almost impossible, to cook, and/or two, the products should release some unpleasant fumes (anything you don’t expect from cooking food) or any type of noticeable odor.
    You all can take my statement with a grain of salt though. I’m just saying what should happen if the claims were true. I’ve heard about bouncing the eggs to see if it was fake and other quick ways to see if these items were not real.

  • Twofish

    Industry observers have been saying that Chinese-branded cars will be in the US in a few months for the last twenty years. It takes a ton of money and time to set up a dealership network, and I don’t see Chinese-branded cars as being interested in the US market.

  • ioannis

    Same Déjà vu old stories…. when the first Japan made cars appeared in the Western markets, every one was running them down on quality or safety issues etc. Then the same old story was repeated for the Korean made cars. In all previous cases both Japanese and Korean cars prevailed… Now it’s the turn of the Chinese cars … just wait and you will see results much sooner than expected.. try to be objective

  • deldallas

    Last year, my co-workers and I were in a 1-year-old Geely when it dropped-dead in the middle of Shanghai. Unacceptable. I’m sure the Volvo buyout is going to transform the kind of cars produced by Geely, but I’d give it a decade or two before paying for one myself. The government officials all seem to drive volkswagens and audis. That should tell you something.

  • Cindy

    It is just good to buy a chinese car because it is much cheaper than others but i think we always need to fix it everytime. We save money but we always have to put efforts everytime. Thanks. Great site, very worth reading for.

  • Marian

    I once worked for a large event that was sponsored in part by Haima Automobiles. They provided something like 50 brand new cars for the event to use which would be cleaned post-event and probably sold as brand new (and even though no single car would get more than 1000km of usage, that still seems wrong to me).
    In my role as interpreter I was assigned to the driver side rear passenger seat of a specific car. By the second day, I had problems getting in and out of the car because the door wouldn’t open from the inside on my side.
    In another car that one of my friends was in, there was a door that wouldn’t open from the outside.
    One morning, one car wouldn’t start because it turned out that the battery cable hadn’t been tightened down enough and had vibrated itself loose.
    There were cars with non-working air-con, cars whose windows wouldn’t roll down, cars with a sunroof that jammed…and you knew that if you’d actually bought one of these cars instead of being part of a fleet for a ten day event that the dealer would somehow same that it was your car (and only your car) that had this problem … “must’ve just gotten lucky” but so many of the cars had so many minor problems that I immediately vowed to never ever purchase a Haima.
    The next year (and the year after that) I worked for the event again. Haima was a sponsor again. And the litany of minor problems just further served to convince me that if I ever become a driver in China, that it doesn’t matter how nice the car looks, I’ll go with the known brand name.

  • samuel welsh

    no way stick chinese goods, buy from other countries

  • Takeanotherlook

    As long as the Chinese Luxury market keeps preferring GM. Mercedes, Audi, Range Rover,and some Italian exotics to keep them safe in case of a catastrophic crash on Chinese roads instead of buying a Lifan, Zyote,BYD ,Chery, Geely or other car . It speaks VOLUMES as to what the quality level is for Chinese cars.. People with money you can buy anything you want and they consistently DO NOT BUY Chinese cars..

  • Russell

    Chinese NCAPS standard testing is watered down and not comparable in their head on or side impact tests to European tests. The Chinese tests are done at 10 mph slower. To give Chinese cars now made a more favorable rating. Plus the Chinese NCAPS organization is funded by Chinese car dealers it is NOT an independent organization.
    Wouldn’t want my life to depend on their testing…Make them pass European Safety tests or US Safety tests to be comparable in quality.

  • TOYBOTA

    I’ll buy a Chinese car when it’s 40% cheaper and has comparable quality than the competition. Right now some Chinese cars cost 20% less than mainstream Japanese, American and Korean cars. The 20% that you can save does not justify the poor quality, bad resale value and maintenance. I know the less-40% figure is quite impossible, but the Chinese were able to do it with electronics, why not cars?