Learn from The Chinese and Indian Auto Industry Model

[dprox]

In the case of China: as with tools, shoes, and toys -- so with cars.

There is a range of quality in Chinese-made goods.

Top quality is found in authentic goods, manufactured under license for northern hemisphere MNCs. The consumer has to pay a high price, covering production costs, markups, taxes, etc.

"Beta" quality is found in licensed goods produced on the sly during "break time". Licensees remit nothing to their mother companies and the selling price drops even lower with smuggling.

When it comes to indigenous Chinese car brands, you can speak neither of original quality, nor of "beta" quality, since they are not licensed by any mainstream automaker.

These are independent carmakers who sell cheap by doing away with R&D and product development costs through reverse-engineering and outright copying. They also establish and squirrel away their own tongpats, instead of remitting percentages to a mother company. The downside is that for the sake of "maramihan sa mababa presyo" (aka "Chinese style marketing"), the quality of materials and durability is really, I mean REALLY low, at the moment.

In other words, PROC car entrepreneurs give waaay too much priority to economics of scale and product appearance than product quality. They will likely be riding on this business model until they feel secure about churning out Korean-quality, Japanese-quality, and German quality cars.

We test-drove a couple of them in the last MIAS. The first one was OK, although it felt like driving a toy; but the electrical system burned out on the second -- right on ignition. So, you have to be REALLY REALLY lucky for your 2008 Chinese car not to run into major breakdowns in the first two years of operation. You will get value for money on Chinese vehicles maybe only after, say, eight to ten years from now.

One way to measure the quality of Chinese cars is to monitor their junkyard volumes in the next five years. If I'm wrong about this, then the mainstream automakers have reason to worry.

Now, I wonder how the Tata Nano compares. I'd like to test drive one.
.

[jpdm]

ang galing nung X5 clone...

sobra gaya...

BMW will sue them if they sell it outside China.

The Chinese carmaker said the govt allowed them to make the X5 clone.

hahaha

Yan ang gusto kong gobyerno...

Support local industry

hehe

Ok lang ang mang-gaya to a certain extent. Admittedly, the auto industry is a mature industry. Marami ng nauna.

Cars/vehicles a.k.a horseless carriage were first developed in France. Then Germany, then then US.. Western Europe followed. See the auto history below:

The first self-propelled car was built by Nicolas Cugnot in 1769.
In 1807 Francois Isaac de Rivaz designed the first internal combustion engine. This was subsequently used by him to develop the world’s first vehicle to run on such an engine, one that used a mixture of hydrogen and oxygen to generate energy.

In 1860 thereafter, Jean Joseph Etienne Lenoir built the first successful two-stroke gas driven engine.

In 1885 the four stroke engine was devised. Gottileb Damlier and Nicolas Otto worked together.Daimler created his own engines which he used both for cars and for the first four wheel horseless carriage. Karl Benz, was in the process of creating his own advanced tri-cycle which proved to be the first true car. This car first saw the light of the day in 1886.

The season of experiments continued across the seas in the United States where Henry Ford began work on a horseless carriage in 1890. He went several steps forward and in 1896, completed his first car, the Quadricycle in 1896. This was an automobile powered by a two cylinder gasoline engine. The Ford Motor Company was launched in 1903 and in 1908 he catapulted his vehicle, Model T Ford to the pinnacle of fame.

Bakit, wala dito Britain and Italy?

Anyway, In Asia, we have Japan (started in 1902-now, no.1 global producer), India (started 1947, now no.11 global producer), China (started 1949-now no.3 global producer, Korea (started in 1955-now no.5 global producer). , Malaysia (1960-actual 1985, now largest producer in ASEAN).

and our beloved Philippines (the automotive jackass of Asia led by a jackass government and insatiable and ravenous appetite of Pinoys on IMPORTS....

Gumaya lahat yan sa Western auto industry puwera tayo. Kasi tayo kutsero, ahente, mekaniko at parokyano nila....


Anyway, Lahat ng nabanggit either, nag-licensing agreement, technical assistance, joint venture, re-badging etc... Nagbayad sa kinopyahan.

Ang China, gusto libre. Yung ang mali.

FMC halos nandun na sa stage na ito with Anfra using the powertrain and parts of Mazda until the jackass philippine government entered the picture. Warak na naman.

At least, ang gobyerno ng China, malinaw ang direksyon. Lumaban sa mga giants (in 2006, China is projected to become the second largest producer after Japan).

Ang isang bansa, kung baga, kung sasabak sa labanan para mag-survive, maghanda. Ang masama, di pa nagsisimula suntukan, umaayaw na agad, hindi lumalaban.

Laban. matalo man, at least lumaban pa rin.

Buhay pa rin an native assemblers! So laban! and learn from these countries....

[dprox]

History is replete with economic and technical espionage and copying (aka "piracy").
Even the young Bill Gates pirated the original a computer operating system from a small shop in Seattle and branded it later as MicroSoft when he made his first major business deal (with IBM, I think, for the IBM PC).

In the car industry, spying is endemic. Look at the models and trends. Why do you think cars in the same class generally look alike?

Sa Pilipinas nga, pag may isang nag-fishballs, fishballs na rin ang buong barangay. Doon sa Parma, Italy, halos lahat ng domestic galing Mabini, Batangas.

HOWEVER ...

The way to avoid copying is to DESIGN FROM WITHIN. LET THE FORM FOLLOW THE INTENDED HUMAN FUNCTIONS. LET THE SHAPE EMERGE FROM THE SCIENCE AND TECHNOLOGY. That means,

(1) We have to define WHAT THE USERS NEED AND WANT. We can even go a step beyond that and address their unknown and unmet needs in vehicles.

(2) We need to incorporate THE LATEST TECHNOLOGIES that are DOABLE under the given circumstances.

(3) We can improve on what others have already accomplished.

This is the way to be original.

[TambayBlues]

Found this on the web, download nyo na lang. Maybe we might learn something from it and it might even be useful if anyone here does get the chance to go to the mainland for personal or professional reasons. Who knows it might be the start of a good career in espionage. JK

Illustrated English-Chinese Dictionary of Automotive Engineering
http://**********.com/files/93317702/Eng-Chin_Dict.rar


password : uztranslations

[pitbullz]

pirates? arrr.....

[Jun aka Pekto]

OT
This has nothing to do with the auto industry discussion. I just need clarification because the Bill Gates part sounds like a serious accusation.

History is replete with economic and technical espionage and copying (aka "piracy").
Even the young Bill Gates pirated the original a computer operating system from a small shop in Seattle and branded it later as MicroSoft when he made his first major business deal (with IBM, I think, for the IBM PC).

Did Bill Gates really pirate that OS? Not according to this:

http://inventors.about.com/library/weekly/aa033099.htm

It says he bought the OS (QDOS) for $50k which he then presented to IBM. Bill Gates persuaded IBM to let him keep the rights, allowing him to sell the OS (QDOS) to other computer makers.

There may have been some greed in there. But by the book, I didin't see any wrongdoing. He saw an opportunity and seized it.

Ok. Back to cars......

[wildthing]

that is not GREED, that is MARKETING.

As such if we really want to succede in the cars....we also need to have agressive MARKETING strategy.

[architect]

*jun aka Pekto

The story from that site is the generally accepted one by the industry although some versions have added details such as Kildall supposedly opting to fly a kite instead of meeting up with the IBM guys. Kildall passed away a few years ago, relegated to a mere footnote instead of the place he truly deserves in computing history.

Bill Gates' programming skills are also subject to endless debates but what can't be argued is his business savvy. This was quite evident early on as manifested in the IBM deal. But in terms of sheer technical abilities, Kildall and Paterson were way ahead of Gates yet we all know how things went for each of them.

I guess you can say there is a lesson there somewhere for all of us.

[dprox]

I admit the term "pirated" might have been too strong, since it could be interpreted in its full legal sense. The conversational meaning of piracy is when you present yourself as author, when in fact the real author was somebody else ("plagiarism" is a synonym) - and you make a killing out of it.

I was using the word "piracy" in the same colloquial vein as the movie "Pirates of Silicon Valley" does. I guess only a handful of tsikoteers have seen it. View it here (esp 48:30 to 53:30) ~ [ame="http://video.google.com/videoplay?docid=-1552555273778978142"]Pirates_of_Silicon_Valley_(1999).avi[/ame]

Some pirates are just kinder than others. I hope this helps us gain insights on originality, intellectual property, moral attribution/acknowledgement. Or you can just enjoy the movie. Bring out the popcorn and drinks.

[Jun aka Pekto]

I admit the term "pirated" might have been too strong, since it could be interpreted in its full legal sense. The conversational meaning of piracy is when you present yourself as author, when in fact the real author was somebody else ("plagiarism" is a synonym) - and you make a killing out of it.

I was using the word "piracy" in the same colloquial vein as the movie "Pirates of Silicon Valley" does. I guess only a handful of tsikoteers have seen it. View it here (esp 48:30 to 53:30) ~ Pirates_of_Silicon_Valley_(1999).avi

Some pirates are just kinder than others. I hope this helps us gain insights on originality, intellectual property, moral attribution/acknowledgement. Or you can just enjoy the movie. Bring out the popcorn and drinks.

Understood. I just wanted the clarification and I got it. Sure thing, Boss.

[kitsons]

The guy who invented the system Bill Gates used is an eccentric inventor who didn't mind what he lost. H continured inventing and came up with the Linux systems and some other new thing now. I forgot to take note of his name. What I remember is that he's from one of the scandanavian countries... a Finn or Swede. He gave it to Bill gates for a song.

Ingratitude may be a better term than greed.

Seemingly, many Filipino vehicle innovators lacks the holistic outlook and not band up to improve each and every part of a Pinoy vehicle.

DPROX build with a need makes sense since we are a unique people with a unique outlook on life and how one's suppose to live that kind of life. Sad to say many have embraced cololial mentality that created the monster culture that we have and produced the copy-cat monkeys most of us are.

This forum here I believe is an authentic Pinoy thinking group and we may be part of the new emergence of what is good, true and beautiful in our Filipino Nation.

Bangon na tayo't bana't ng isip at buto!

Kitsons

KItsons

OT
This has nothing to do with the auto industry discussion. I just need clarification because the Bill Gates part sounds like a serious accusation.



Did Bill Gates really pirate that OS? Not according to this:

http://inventors.about.com/library/weekly/aa033099.htm

It says he bought the OS (QDOS) for $50k which he then presented to IBM. Bill Gates persuaded IBM to let him keep the rights, allowing him to sell the OS (QDOS) to other computer makers.

There may have been some greed in there. But by the book, I didin't see any wrongdoing. He saw an opportunity and seized it.

Ok. Back to cars......

[kitsons]

ARchitect,

Was that Kildall who also came up with the Linux system. I saw the guy being interviewed on television last year? or was it the other year?

Now am not sure what Gates got from the Linux guy.

Would you have the history on this?

Kitsons

*jun aka Pekto

The story from that site is the generally accepted one by the industry although some versions have added details such as Kildall supposedly opting to fly a kite instead of meeting up with the IBM guys. Kildall passed away a few years ago, relegated to a mere footnote instead of the place he truly deserves in computing history.

Bill Gates' programming skills are also subject to endless debates but what can't be argued is his business savvy. This was quite evident early on as manifested in the IBM deal. But in terms of sheer technical abilities, Kildall and Paterson were way ahead of Gates yet we all know how things went for each of them.

I guess you can say there is a lesson there somewhere for all of us.

[jpdm]

why are the chinese so prolific in copying vehicles from other countries and are very good in turning copied products into a product that they can truly call their own?

why are pinoys after copying and converting willy's and kennedy GPs into jeepneys in the late 1940s have remained fixated with the same design and look after 60 years?

are pinoy jeepney fabricators a bunch of dinosaurs of yesteryears that may become extinct in the near future?

with all the technologies (maintream vehcile just lying around), why cant they follow the Chinese model...

local fabricators, what is wrong with these guys?

[architect]

Kitsons,

Linux is actually an open-source UNIX derivative whose development was initiated by Linus Torvalds, the guy you're referring to. Before that, most multi-user platforms, such as Novell Netware, MS Windows also derived a lot of their components from UNIX.
Linux has since morphed into several distros, notably Red Hat, Mandiva, Linpus, Knoppix, Xandros, and of course, the Ubuntu's (Ubuntu, Kubuntu, Edubuntu, etc.).

UNIX itself had several forks, AT&T, BSD, Microsoft Xenix, then SCO and Microport(? not sure about the name now but they were also based in Santa Cruz. In fact, I worked on a project for them). SUN Solaris came much later on.

AFAIK, Kildall was never actively involved in any of the open-source UNIX/Linux developments, although I won't be surprised if he was.

Hope this helps.

[dprox]

When you trace the flow if ingenuity and creativity, you realize that there are milestones and there are obstructions along the way.

Some people alert enough to notice opportunities and deliver milestones are adulated and remembered, and others are not.

But it is very presumptious for anyone to say that he or she alone is solely responsible for an ingenius discovery or invention, and is not indebted to any other.

It is good to remember and acknowledge those who have helped you get to your eureka points.

Then there are those who, after inheriting ingenious devices, get stuck and flow no more.
Those are who we fondly call "dinosaurs".

Let's all go with the flow and be alert to the opportunities
... without being ungrateful opportunists.
.

[dprox]

why are the chinese so prolific in copying vehicles from other countries and are very good in turning copied products into a product that they can truly call their own?

why are pinoys after copying and converting willy's and kennedy GPs into jeepneys in the late 1940s have remained fixated with the same design and look after 60 years?

are pinoy jeepney fabricators a bunch of dinosaurs of yesteryears that may become extinct in the near future?

with all the technologies (maintream vehcile just lying around), why cant they follow the Chinese model...

local fabricators, what is wrong with these guys?

Iba lang siguro ang timpla ng HORMONES and FAMILY. There's something in Chinese culture and blood that somehow keeps them working, working, and working. And after a hard day's work, they rest by working a little.

Chinese parents drive their kids to work. Filipino malay parents pamper their children, or at least raise them laissez-faire.
And then maybe it's weather-weather lang. Ang init kasi, e, di ba? :sunny: Whew!

[luckystrike]

When it comes to indigenous Chinese car brands, you can speak neither of original quality, nor of "beta" quality, since they are not licensed by any mainstream automaker.
In other words, PROC entrepreneurs give waaay too much priority to economics of scale and product appearance than product quality. They will likely be riding on this business model until they feel secure about churning out Korean-quality, Japanese-quality, and German quality cars.

This is an overgeneralization of what was & is in the chinese auto industry. First of all, we have to look at the context in w/ch the chinese auto industry was spawned. Since the beginning of the "opening up" of china in the late 70's, the gov't had a simple economic direction for all foreigners who wanted to sell their products to the chinese. If you want to sell your product in china, build it/manufacture it- in china together w/a local partner whom we will introduce to you. This is the reason why almost all the large manufacturers of whatever products are partnered w/either local or national gov't entities. The other requirement was that any outmoded/replaced technology should be freely given to the local partner for him to develop as his own, & sell as his own. In this way, the chinese gov't hoped, the process of industrialization would be fast-tracked, & thus we have what we have today coming out of China. But you see, even the communist chinese gov't could not repress the entrepreneurial spirit of its citizens, despite 30 yrs. of communist rule. The technology transfer, w/ch should have been limited to the state-controlled partner, grew & grew w/ every new joint-venture that was established in china (by last count, there are 75 joint-ventures in the complete automotive manufacturing sector, many,many more if you include auto parts, robotics, etc.) & even the chinese gov't has admitted that it is only now getting a hold of the problem. Thus, the immediate past & current crop of indigenous chinese vehicles (cars & trucks) are based on older models of non-chinese brands, & unlicensed copies of whatever products abound.

If you look at the current models of products w/ch are the result of legitimate joint-ventures in china, e.g. FAW-VW, DONGFENG-NISSAN, etc. their locally-branded models are based on discontinued models of the foreign joint-venture partners, suitably "sinisized"for the local market. They are, however prohibited from exporting these models. These "clones" have been so succesful that, in one extreme case-there are more lincolns sold in china than in the us. the lincoln towncar, for example is so popular in china that the local jv partner has been allowed to develop a new model from it for the chinese market using the lincoln marque.

What we need to understand is that the chinese automakers do not need to export their products to survive. the successful ones cannot even meet the demand w/ch grows at a steady rate of between 17-20%pa. there were a total of 8.8million cars & trucks sold in china in 2007, up from 7.5million the previous year. We have to realize that the needs & tastes that these automakers address are those of the chinese, w/ch may not be ours. And as the economy grows & the chinese become more affluent, they demand better quality & design in all of their products.

What we see on our shores are not the best of the chinese auto industry. The best the chinese keep for themselves, for their market or else try to sell them in other large markets like the US, or the EU. What we have, at least in the car sector, are models released for export.

I once asked a chinese export rep fom a chinese truck manufacturer if his company would be willing to let me market his products in the Phils. He asked me for the indicative volume. I said maybe 500 units. Per month, he asked. Per year, i said. He smiled & said, we can produce your 500 units in 12 days, in the colors you want, & the execution you want. The simple fact of the matter is, at 100,000 units/yr., the Phils. is a miniscule market for the chinese. what we sell in one year, the chinese auto industry sells in 4 days.

[donbuggy]

China was able to send a man into space using secondhand Russian rocket technology. So why can't we use (under license) other manufacturers' old automotive technology to make our own vehicles, learn from it and improve it?

------------------------------

Gary Kildall was the man who could have been Bill Gates. Kildall created the CP/M operating system that IBM tried to license for their IBM PCs. But negotiations went nowhere so IBM turned to Bill Gates. Gates bought QDOS from Seattle Computer Products, improved and renamed it to DOS and licensed it to IBM.

Kildall examined PC-DOS and concluded that it was similar to CP/M but at that time intellectual property law for software was not clear enough to sue. So Bill Gates became a billionaire (by being a better businessman) while Gary Kildall died unknown outside the computing industry.

http://en.wikipedia.org/wiki/Gary_Kildall
http://www.businessweek.com/magazine...5109_mz063.htm

[jpdm]

I once asked a chinese export rep fom a chinese truck manufacturer if his company would be willing to let me market his products in the Phils. He asked me for the indicative volume. I said maybe 500 units. Per month, he asked. Per year, i said. He smiled & said, we can produce your 500 units in 12 days, in the colors you want, & the execution you want. The simple fact of the matter is, at 100,000 units/yr., the Phils. is a miniscule market for the chinese. what we sell in one year, the chinese auto industry sells in 4 days.

The philippine auto market will not go beyond the record 160,000 units in 1996 and will remain stagnant simply because Pinoys cannot buy these very expensive CBUs. At the same time, the destruction of high paying and value added industries here by massive importation reduced the income of Pinoys (in fact, increase the number of poor people.)

Massive importation enriched a few people notably the importers but ravaged the whole country specially industrial workers...

This created a terrible income gap between the rich and the poor in the Philippines....

As the few rich people talk about buying new vehicles, millions of people talk about how to buy the next meal.

China should be emulated sans its poor human rights record because it cares for its people specially the hundred millions of Chinese who were starving before....

China knows that in order to survive in this planet, must work to develop its economy ---own manufacturing industry, agriculture and almost food self-sufficiency and not rely on others...

Our "experts" on the other hand say it's ok to just import everything. Now, we are at the mercy of exporters

China and Japan, Korea, India, Malaysia for that matter boast of a dedicated pool of experts and economists which are at par with the best in the world and have 1 crucial common denominator--they know what is truly good for their country.

In the philippines, we boast of experts ready to sell the country for a song.

i.e. Petron the only remaining oil firm that can be used as a hedge against voracious oil companies in the Philippines will be sold for a song by unscrupulous private individuals in cahoots with government officials without thinking about its dire consequences and its negative effects to our country....

[luckystrike]

The philippine auto market will not go beyond the record 160,000 units in 1996 and will remain stagnant simply because Pinoys cannot buy these very expensive CBUs. At the same time, the destruction of high paying and value added industries here by massive importation reduced the income of Pinoys (in fact, increase the number of poor people.)

I couldn't agree more. But we have established an automotive industry that does basic assembly & local parts substitution w/ch is undermined by 2nd-hand importation of cars & trucks. First we say that we want to have our own auto industry, then we apply excise taxes w/ch drive up the prices of this industry's products, then we complain that the prices are too high & have become unaffordable for the masses, so we allow 2nd hand imports because they are cheaper, w/ch then undermines our automotive industry. There does not seem to be a clear-cut vision of what we want, nor is there the will to carry out the policies for the long term. The result is short-term gains w/ch are great when the going is good, but fail miserably when bad times come around.

What we can learn from the chinese auto industry is simply this-establish a policy w/ch will benefit the most no. of people, & STICK WITH IT UNTIL YOU SEE POSITIVE RESULTS.