It's a Small World After All- A Car Guy's Advice to China

Travis's picture

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fil's picture

"Ford announced today that it's going to further develop it's talks with China’s Geely Group in "more focused" negotiations to take-over the languishing Swedish automaker Volvo, a branch of Ford since they bought the brand from Volvo AB some ten years ago- for a staggering $6.45 billion in 1999 money."

I'm telling ya, it's those dashboard lights. Look how colorful they celebrate New Years.

Now where's my friend from the other thread??? 

Careless Whisper's picture

Do your homework Travis. GoldmanSachs owns 15% of Geely. Volvo gives Geely dealership distribution. They will crush the competition.

Travis's picture

Oh, right- I forgot...  I heard Goldman too is buying a stake in Yugo in a bid to bring it back...  Car & Driver is hailing it as the next Lexus...  It'll outsell Honda in a year's time, by Goldman's own admission, of course.

Careless Whisper's picture

GM was a big bloated bureaucracy that didn't listed to its customers. Now its a big bloated bureaucracy that is 40% owned by the governement. Geely is a lean capitalist company. It's on the Hong Knog stock exchange. GoldmanSachs now owns 15% --- of a foreign car company. Do you really think going forward a company like GM will be successful against Geely?

Check this out:

http://image.motortrend.com/f/auto-shows/2008-beijing-show-the-top-10-chinese-concepts/9713437+cr1+re0+ar1/geely-gt.jpg

 

bpj's picture

'My petty advice to the Chinese?  Start racing.  Racing, believe it, or not- sells.  What competes and wins on Sunday, sells in the hearts of customers and wins the national pride of a given producing nation.'

 

what engine goes into Toyota's NASCAR racers?

earnyermoney's picture

They start and subsequently modify the stock V8 you find in their Tundras.

Bam_Man's picture

"Everything, with regulations being what they are, is pretty “safe” these days"

 

Not exactly. Saw a report the other day noting that the ridiculously over-hyped Tata Nano has displayed a nasty tendency to CATCH FIRE. And it does not require a rear-end collision (ala the Ford Pinto) to do so. It just spontaneously combusts.

One can only imagine what hazards await the proud new owners of a Geely.

Something tells me that neither Indian nor Chinese cars will be showing up in the US anytime soon.

ozziindaus's picture

Wanna bet? Who's going to stop it? Remember the Chinese toy and toothpaste debarkles?

Bam_Man's picture

Yeah, anything's possible.

In that case the cars will sell for $2,999 and the insurance will run you $9,999 a year.

Careless Whisper's picture

People laughed at the Japanese cars in the 1970's. Laugh at the Chinese at you own peril. Would you rather drive a Chevy Malibu box or something like this for less:

http://carscoop.blogspot.com/2009/03/geely-to-show-updated-gt-concept-in.html

 

 

walküre's picture

Their looks are deceiving.

Take it from someone like me who has driven Chinese cars.

Slam the doors and the wheels fall off.

They should stick to the toy manufacturing.

Just wait for the Hasbro 6000 GT which "transforms" into a ride-a-mower.

 

ozziindaus's picture

US OEM's better start building ALL their cars in China if they want to compete. This includes their flagship brands. Cars have gone the way of electronics in the sense of being a commodity. GM realized this in the early 90's and have all but abandoned NA. The trend is grim for US manufacturing thanks to Accountants, Lawyers and HR executives running the industry.  

Slewburger's picture

The only thing keeping mfg of vehicles in this country is regulation.

Safety and emissions compliance is a giant liability.

You think people were pissed off about lead in toys? Wait until they're burned alive or the brake components fail on their children's school bus.

I've worked for both an automotive manufacturer and a Tier 1 supplier. And I do not know all, I just want to give you some perspective.

The scenario I see is final assembly still continues here or for what ever market the vehicle is destined for, but more and more components are made overseas.

Ford and GM required suppliers to quote prices at "Mexican" labor rates 10+ years ago....China is the new Mexico.

As far as Travis' argument "go racing"....

In this economic environment racing is a luxury, a R&D pipe dream.

What racing series actually sells vehicles? I would say on a global scale WRC.

Case in point: Subaru pulled out of WRC.....

Subaru was WRC for the last two decades.

Before that it was Audi.

From an engineering perspective, racing breeds innovation out of competitive necessity. I understand that.

But try to convince an accountant or manager that spending 1/2% off the bottom will increase the market share more than two extra colors on the vehicles brochure.

 

 

cthulhu's picture

With all due respect -- "Accountants, Lawyers and HR executives"?

Are we forgetting someone? As in, Unions and the Politically connected?

When siting a plant has nothing to do with logistics and manufacturing, and everything to do with tax incentives and municipal gimmes, is it any wonder that the logistics and manufacturing quality decline? And when so much of the cost of a car is retirement pay to former workers, is it any wonder that present-day materials, labor, and overhead is shorted?

I don't see Accountants and HR executives making the cut as being a serious threat to the industry.

Mark Beck's picture

I think Jaguar should have been brought back to Great Britain with a public/private funding program. Engine development would then focus on I6 and V12 engine families, embracing the traditional Jaguar long nose profile reminiscent of the E type. Great Britain has some of the best mechanical minds in Auto racing and this technical talent could have help fine tune new engine and chassis designs.

Once the V12 was perfected I would hire an Italian coach builder to help with the body style:

Front engine body; much like the Daytona Spider and the E-Type.

Mid engine body; DeMataso Mangusta and Lotus Esprit.

High end luxury; Twin Turbo V12, body like the RR Ghost, but with more Bugatti like accents.

Anonymous's picture

Cleraly you have never owned a Jag. I have and it was the WORST automotive experience of my life.

Anonymous's picture

The Ford Focus routinely beats the Soobies in rally races....

Anonymous's picture

...only in the WRC series where the cars are custom built race cars that only vaguely resemble the production car. Look to amateur rally where they use lightly modified production cars and the Subarus rule.

bpj's picture

Saw my friend at the Fred's Mexican Cantina in Laguna Niguel, CA yesterday and didn't see his Smart Car in the lot. ? "Whats up", and he told me he won't drive it when there is high wind warnings.

Bam_Man's picture

Wouldn't eating a big meal at Fred's Mexican Cantina take care of any "center of gravity" issues with the car? (assuming he doesn't visit the toilet until he gets home)

Prophet of Wise's picture

Former U.S. Car Czar Ron Bloom unveils pivotal next leg in the Obama Administration's continuing efforts to revitalize U.S. auto industry:

  http://www.rechargeonline.co.uk/1-4/info/h7248_my_first_car_info.htm

 

Anonymous's picture

Ask any cop who has seen vehicle collisions between a Volvo and any other make. Volvos are sturdy, reliable and bulletproof. It IS indeed a small world, and the unsustainable "car culture" is destined to become victim to this. Look what people in the EU have been driving for decades, and the suggestion to promote racing seems as ridiculous as any automobile with "Made in China" sticker. They make toys, clothes, electronics. Germans and Japanese make cars. Auto ownership costs are rising and per-capita incomes are falling. The Chinese and Indians have arrived at the party 25 years too late. Everyone else is packing it in and going home on their bicycles.

Anonymous's picture

You don't know racing. You obviously don't know that almost all car makers don't race on their own. They delegate the racing practice to private teams. Sometimes makers do buy out these teams but the teams management, staff and facilities remain unchanged.

To car makers, racing means this: pay the teams(really just businesses) to build cars bearing their brands. If it wins, glory goes with the maker/investor. If it loses too much, wrap it up and find a different "works" team, race again and hope for the best.

Anonymous's picture

Have a friend in the recycling buisness. One of the machines flattens cars for the shredder. The old Volvos and Mercedes had to have the A,B, and C pillars cut to start the crushdown. Otherwise they would dent up but refuse to flatten. The crusher starts with 36 ton incresing by mechanical leverage as the car flattens. The newer ones crush like any other car. Apparently not enough accident crumple so the roll cage was weakened.

Anonymous's picture

Travis left out the prospects for the other Swedish brand SAAB. They have just been bought by a group with sport car maker Koenisegg as the front man with design etc. According to Travis's argument that is a special brand but he failed to discuss it's prospects....instead dissing Volvo.

Personally I think the SAAB tie up is exciting and actually elevates the brand. Can't wait for thier new models to come out. It's 100% Swedish again (absolut Svensk)...as to whether that will garner a premium remains to be seen

If Volvo goes to the chinese...thats it, no friggin way I'm thinking about buying one.

Travis's picture

You sure about that?  Koenigsegg Automotive AB has a Chinese partner- BAIC.

Chinese, Swedish or not...  Volvo and Saab the cars, will never be the same, not ever again.

Anonymous's picture

Volvo is out there but SAAB has more a chance of retaining it's former glory

on KSG; design + production in Sweden. Of course China is the manafacturing hub of the world economy so everyone has a partner there.

I live in Gothenburg...volvo's hometown but I drive a Renault and my next car may be a Citroen or Toyota. Know many people throughout the volvo chain and even suppliers
A knowledgeable person once said don't buy a Volvo, costs too much. You can get the same tech and safety from a ford which cost a lot less.

FYI
BMW Audi and VW are still soo German. I agree with you

Anonymous's picture

I am skeptical of anything china to be frankly honest. As one whom has worked with them on consumer products, they are the kings of shortcut, and I do not expect their cars to be any better, unless they can resist their thrift like instincts and build something with quality.

walküre's picture

Chinese cars are designed by Hasbro toy manufacturers.

It's the same breed and mentality.

The innovation comes from Europe and North America.

How many times have you had to replace your "made in China" kitchen appliances over the last few years?

While I appreciate the brand new toaster for $19.95 or microwave for $29.95, I cannot remember my parents having had to replace their kitchen stuff every 6 months to a year.

Airbus is now manufacturing in China.

I would refuse to step on a plane "made in China".

Enough said.

 

Anonymous's picture

It's naive to think that goods from China are designed and developed by Chinese themselves. In fact it's Western companies from EU and NA that taking advantage of cheep labor in China and India and moving their production to developing world. They are closing factories in NA and open factories in China, and this factories are using modern technologies from the West.
And that is terrible. It will cause all manufacturing to be eventually shifted from developed countries to China and Indonesia, leaving America a country with a very grim prospects...

MikeNYC's picture

I drive an older (2000) V70R and love it. I've thought about what a Chinese firm would need to do with Volvo.

1. Restore the quality. Older Volvos lasted forever. Mine has a burgeoning market in replacement window switches because seemingly 100% of Volvos have a failure with this part before well 100K miles. And that's just the begining. If I bought this company, I'd hire the top two or three quality experts in the world and do whatever they say.

This is the most important thing, because once Volvo is Hyundai, or whatever the equivilent of a really shitty, or even formerly shitty, Chinese car company is, it's game over for real.

Volvo quality has slipped big time since the 240DLs everyone drove for 200K. Fix that now.

2. Do something about the parts prices. hey, it's China. This ought to be easy. Parts for these cars are crazy expensive, and others have told me they wanted one until the found out the maintenance costs.

3. Keep it as Nordic as possible. For now. This ain't the time to get all "China Pride" on running this company.

4. As Travis said, race. Volvo has a proud racing history, but it seems to have faded somewhat. Get something crazy built out there to win the WRC. Americans don't care, but the rest of the world does.

4a. Bring back the V70R. For real. Not the half-baked half-assed show-no-go R-Design. Volvo should OWN the fast wagon class, dammit, not Audi, Subaru or anybody else.

5. Acura should not be able to run those ads that say they are the only maker with all models at the highest safety level. Reclaim the safest car title, or else what's the point of buying Volvo?

It's just five things. Ought to be easy. ;-)

Oh yeah, lose the glass hatchback. The P1800ES was a beautiful car. Bringing back it's glass hatch on the coupe means something to the car designers at Volvo, but in the modern world it just looks like a Pacer revival. Who thought THAT was a good idea?

Lastly, make a shooting brake.

(not that it will help the company. I just want them to make one again.)

sethstorm's picture

 

2. Do something about the parts prices. hey, it's China. This ought to be easy. Parts for these cars are crazy expensive, and others have told me they wanted one until the found out the maintenance costs.

3. Keep it as Nordic as possible. For now. This ain't the time to get all "China Pride" on running this company

----

They'll just pull a Lenovo; They'll keep it as it is now but make it into something worse at an imperceptibly slow rate.

Cheap parts do very little good when China insists on abysmally low quality. The unfortunate folks building those parts are being whipped into quantity as job 1.  That's why I avoid a Chinese built car like the plague.

 

sethstorm's picture

Tata, from what I’ve read, is doing well with the deal-making and selling Jaguars and Range Rovers despite their “Prince of Darkness” pasts.

Surveys have concluded- they’re doing okay, they’re putting out new models, they’ve kept it mostly British, which was better than what BMW could do with Land Rover a decade ago- remember that Anglo-Swabian marriage from hell?

----

It is not hard for Tata to keep it mostly *British*. In spite of that, I'd bet there's a good chunk that have sworn off Tata Jaguars; that amount being more than the proverbial "acceptable loss" in customers.

As for China, the Other Major Third World Country...

China does not make cars, they make mobile coffins in the form and function of a car. It doesn't matter if there's a Western brand backing it; it only makes the Western branded car worse.

This is a case where China should and must be shut out (and done so in a more complete manner than the 1980's attempt at Japan). While that might be against some folks orthodoxy, I see them making junk well into the 22nd century.

They'd have to horribly handicap every racing league to give them any chance.

Anonymous's picture

In California buying a used Volvo is the cheapest way to get a great fully loaded and sturdy sedan with acceptable mileage (20/26mpg).
I like mine a lot.

laughing_swordfish's picture

You mention Hyundai.

I can remember when Hyundai's "quality" was such that it made the Yugo look like a step up.

The Koreans had the stones to totally revamp the product line based totally on quality - of the product and the dealership/service experience as well. Pretty much the same for Kia - their "low price" brand.

I know because I worked in marketing and QA for HNA in the early 2000's and remember the tremendous dedication these folks had to building a quality car at a fair price.

I don't know about you but I've rented a Hyundai Elantra on trips and found it to be a very reliable, driver friendly car - a plain jane version of a Toyota Corolla, but so be it.

Beat the hell out of the Dodge Caliber I rented on my last trip.

Have no plans on getting rid of either of our two paid-for cars but if one needs replacing I'd buy a 2-yr old used elantra or sonata.

 

KptLt. laughing swordfish

9er Unterseeboote Flotille

 

 

 

sethstorm's picture

Question is, when will Hyundai expand their R&D to more than just a few Xerox machines, a few IP lawyers(to help with dodging parts of the law), and a few artists(who only produce at the direction of the lawyers)?  

I look at about anything from that company and ask that question.

Whether it be the Hyundai "Town and Country" Sedona, Lexus look-alike SUV's, the Buick-Mercedes Benz-Lexus chimera of the Equus, Subaru-like Forte, Civic-knockoff Koupe, or the Scion like Soul, they have made knockoffs since the beginning.  It's easy for them to do quality when they don't have to spend money designing something completely original.

No thanks, but I'll have mine American and north of the Mason-Dixon(GM).  I just won't be buying cars like the Chinese-powered Equinox or the Opel-based Buick Regal.