China’s emerging carmakers are often the butt of jokes in industry circles abroad, where they have a reputation for building shoddy cars with knocked-off designs and eccentric model names such as Cool Bear, Tiggo or Dingle.
But the derision is dying down as Chinese carmakers begin to produce better-looking and higher-quality cars in a drive to capture local market share and enter foreign markets.
At this week’s Auto China show in Beijing, local producers are unwrapping a new generation of models with better engines and original designs that bear the mark of their work with foreign automotive suppliers such as Bosch and design houses like Pininfarina.
Chery Automobile, which started in small cars, is showcasing new emissions-cutting technology and a range of higher-class cars.
Rival carmaker Geely’s line-up includes the Tiger, a low-slung Italian-designed concept, or non-production, car with styling that owes more to Alfa Romeo than Asian value brands such as Kia. The company says the car exemplifies “an aggressive and confident Geely”.
“We want to use new technology, improve quality, then improve customer satisfaction and after-sales service,” says Li Shufu, Geely’s chairman. “Then we can lift the brand.”
Chinese manufacturers are already increasing their sales in south-east Asia, South Africa, Latin America, the former Soviet Union and the Middle East. But they also want to break into western Europe and North America, where few are selling vehicles yet.
Early exports to Europe by carmakers such as Brilliance and Jiangling Motors foundered after the automotive press reported on the cars’ poor crash test results.
Last year’s Frankfurt motor show, the industry’s largest, was overshadowed by threats of legal action by Daimler and other carmakers against Chinese companies exhibiting models they claimed flagrantly copied theirs.
Industry analysts say the damage to Chinese carmakers’ image from their early missteps could take years to overcome.
“That is the challenge for Chinese manufacturers: the Made In China reputation has been damaged so badly they will need to discount significantly,” says one consultant.
Chinese carmakers are aware of their reputation, and are investing heavily in foreign equipment and knowhow in a drive to improve quality and bolster the prices they can command.
Great Wall, one of the biggest rising carmakers, has installed a state-of-the-art crash test facility at its plant in northern China, using equipment and dummies imported from the US.
After exporting vehicles on a limited basis to Italy and the Balkans, it plans to export a new sport utility vehicle from 2009 that it says will meet all European Union emissions, safety and other standards.
It is also diversifying from SUVs and pick-up trucks into cars, including the Jingling, a “quality car” for China that it says can compete with foreign brands.
“We have to build up quality to change people’s perceptions of locally built cars,” Wang Feng Ying, Great Wall’s president, told an industry conference at the weekend.
Great Wall and its peers are having to defend their businesses against the big foreign brands.
The domestic market is fiercely competitive, and according to consultancy JD Power, local players have seen their share plateau at about 29 per cent, up from 18 per cent in 2004.
China has more than 100 brands on the market, more than in North America or Japan. International brands are targeting the same business and improving the quality and customisation of the cars they sell in China.
Most foreign carmakers, wary of transferring technology to China, do most of their work on China-bound cars overseas, tweaking homegrown models to please local tastes by adding features like exterior chrome highlights, plusher seats and extended wheelbases.
Now, with prodding from Beijing, foreign carmakers are beginning to do more design and engineering work in China.
Hyundai Motor, which opened a $867m plant outside Beijing this month, is re-engineering its old Sonata mid-size sedan with engineering and design input from its research and development centre in Beijing. The South Korean carmaker says it will be an all-new car.
General Motors in Beijing unveiled the Invicta, a four-door concept car designed with input from its design studio in Shanghai.
And with sales of GM’s Buick cars in China nearly matching those of the US, it is not difficult to see why foreign carmakers are raising their game.
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