China's domestic car makers are failing to compete

Autocar, October 30, 2013

China’s ailing car makers must “conquer their home market” before they have any chance of succeeding globally, according to Asian car industry consultant Bill Russo.

The MG 6 is outsold three to one in China by the Skoda Octavia

The home-market share of China’s car makers has been falling for some years, with passenger car sales by domestic brands dropping to just under 29 per cent of the market last year.  

China is expected to export around 580,000 cars this year, a fall on last year, and many of the vehicles will be sold to less competitive markets such as the Middle East, Africa and Latin America.

Making inroads into the US, Western Europe and Asia-Pacific markets is still seen as a huge step, despite the Chinese government wanting to see its domestic car industry exporting to the rest of the world.

Speaking at last week’s Global Automotive Forum in Wuhan, China, Russo said although China would be the “centre of the automotive universe in the 21st century”, a globally competitive car maker had yet to emerge from the country. “It is difficult to live in the West and not buy Chinese-made goods, but where is the Chinese Hyundai?” he said.

Russo, who was director of product and business strategy at DaimlerChrysler, said the first hurdles for the domestic Chinese car makers were the problems caused by the “fragmentation” of the industry around the huge country. “There is no Chinese Detroit,” he said. “We need to see a consolidation of Chinese companies and get rid of the weakest. Such small companies cannot grow to scale in competitive markets.”

The next step, according to Russo, is for China’s brands to “develop a value proposition”, which he suggested could be “affordable transportation”. Referring to many domestic car makers who still think that undercutting imported cars is the most effective strategy, he said “China cannot trade on the proposition of ‘cheap’ cars”, because cheap is associated with poor quality. “‘Affordable’ is a much more positive association,” he said. 

Business paper China Automotive Review underlined the problems facing domestic brands even when equipped with cutting-edge technology, pointing out that just 4905 Roewe 950 models were sold last year, while its Buick LaCrosse sister car (which shares the same GM Epsilon platform) sold 86,100 units.


Bill Russo to Host Panel Discussion on Connected Engineering Solutions at Futurescapes 2013

Shanghai, China, November 14, 2013

Organized by:  Tech Mahindra

Venue:  Grand Hyatt, Shanghai, 3:30pm onwards

Panel Discussion: "Challenges and Opportunities: Business advantages of implementing Connected Engineering Solutions"

Research advancements in various areas like Miniaturization, Sensorization, Internet of everything, Computing and Communication technologies enables autonomous, smart ,safer products to the customers today. These Products which were conventionally designed for human interfaction, are now getting designed to interact practically with anything bringing Intelligence into the Product and its ecosystem.

What evolves is the current world of objects and products - Smarter, Safer, Connected and of course Intelligent.

Conceptualizing, Designing and Developing a sophisticated system of products interacting with each other in a cohesive manner in order to achieve a task on their own – needs altogether different kind of mind-set, engineering skill-set and technological expertise. We have assembled a distinguished panel of experts to discuss and debate the challenges and opportunities of implementing connected engineering solutions.

Dr. Gao Ming, CTO China, GE Lighting
Dr. Young Peng, Director, Tailored Products, Covidien China
Dr. Frank Zhao, Director, Research Institute for Automotive Industry & Technology Strategy, Tsinghua University
Mr. Jim Liu EVP & COO, SBI & TH Venture Capital
Mr. Glenn Hou, Executive Director, Frost & Sullivan China

Moderated by:

Mr. Bill Russo, President, Synergistics Ltd. And former VP, Chrysler NE Asia