Chinese whispers

Words - Otto InsiderComment

Japanese cars -- a hard-earned catchphrase for reliability, durability, dependability... It's been 40 years since the first meaningful supplies of the funny-looking tiddlers where craned off freighters (no ro-ros then) and onto our shores. Oh how the local manufacturers and assemblers scoffed. Not any more.

The Japanese patiently built their reputations. Now you won't see finer shut lines, long-lived petrol engines or more durable interiors able to withstand our searing summers than in cars from Japanese manufacturers (even those built in cheaper or more conveniently located factories around the world, ie: Altona!)

The Japanese had 30 years to win over Western car buyers with cars that grew to embody the term 'conservative styling'. Only the European heartland remains to be conquered and that plan is in the final stages of execution.

In the 1990s, another carmaking would-be giant beefed up its plans to take on the world. South Korean brands had enjoyed only mediocre export success till the mid-1990s, but with technology advancing rapidly and more modern factories springing up and European design houses opening, the product and the brands took on new energy.

The result was a deluge of products, priced to make the Japanese wince and a reliability and durability record that improved with each page of the calendar.

What the Japanese achieved over a period of 30 years, the South Koreans have mostly managed in a third of the time. They have the product right in many ways but desirability, word of mouth advocacy and resale values still need some work. That takes time.

Unfortunately time is what the South Korean brands don't have. Kia folded and was snapped up by Hyundai after going too far too fast, while Daewoo buckled completely. Through gritted teeth, GM saw a future for the carmaker and today Holden's lower orders are sourced from the rebuilt Daewoo automotive empire. Now Europeans are sold Daewoos badged as Chevrolet Don't write in, I know it doesn't sound right, but...

Before the South Koreans are allowed to burrow their way comfortably into our psyches hiking their residual values and therefore strong appeal in the used market, there's another wave of Asian exporters boating up and steaming south.

China, for all its communist industrial bluster is accelerating hard to become the most diverse manufacturer of motor vehicles in the world. There are more brands than you can count, and many are married through joint ventures to the darlings of the Capitalist economies. Some brands are going it alone, though how alone depends whether you share their understanding of the term 'Intellectual Property Rights'.

Word around the traps is that we'll have a Chinese automotive brand up and running in Australia before the year is out. No one's willing to name the names, but the writing is on the (Great) wall.

Problem is though, the bargain basement brands have been fairing surprisingly poorly in recent years. Hyundai's best month in Australia racked up around 11,000 Excels. But it's been downhill from the 60,000 cars per year high-water mark of 1997 ever since.

Kia has stalled since it shifted from being imported by an independent to the factory store and Holden's success with Daewoo product probably has more to do with its commanding footprint in Australia and its controlling interest in the manufacturer than the product substance (sub-$12K Barinas anyone?).

Consider the latest VFACTS sales figures. Toyota is blitzing the total market (again) -- after only two months its total sales dwarf Ford two-to-one and its lead over Holden is 10,499 units (or more vehicles than Ford sold in February).

Slip down the list past the Broadmeadows brigade and the next biggest seller is not Mitsubishi, but Mazda, followed by Nissan then by Mitsubishi, Honda, Hyundai, Subaru and VW upholding European honour.

It is actually the Wolfsburg team that has displaced Kia from the top-ten monthly sales slot, again breaching the 2000 sales mark and adding fuel to the fire of the European marques, who are all looking up -- with the continual exception of Renault which appears blighted by some mystery illness. (Even having its driver win the Formula 1 World Championship can't help sales.)

This booming market has Mazda 19.6 per cent up on last year's record sales. Even Nissan had a red-hot month in February, recording its best result for the month in 18 years.
 
Year to date, Honda is up 18 per cent and Hyundai down 18 per cent. So maybe now is not the best of time for the Chinese to come calling with bargain basement brands.

But they have thought of that too. And just as white goods and consumer electronics brands from China are pushing themselves upmarket, Chinese cars too will become more widely accepted.

The German premium brands have long had assembly joint ventures in China. Is it just a matter of time before we're driving a premium luxury brand with a 'Made in China' tag?

VW failed at the first attempt with the Polo sedan, but they will be back.
 
Car makers in China are betting no one will care where the cars come from. And at the rate their consumer goods are improving, by the time the cars arrive, 'Made in China' may even have some of that up-market Japanese cachet about it.

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