Learn from The Chinese and Indian Auto Industry Model

[jpdm]

right sir.


The private sector naman is always willing to risk. Ang tsikot for that matter took the risk of putting up a dedicated thread for the eventual emergence of a Pinoy vehicle...

Ang problema yung pinakaasahan, ang gobyerno ng Pinas ang simisira lahat e. Pabago-bago ng policies...puro racket etc..

More on short-term goals rather than long-term goals. Why?

for instance rice...they rather import kasi lucrative for importers and commision-ners ( got it COMMISION-NERS). Kailangang kumita kaagad para pag naalis sa puwesto may nakuha ng pera.

Yung second-hand running coffins (medyo laos na; YAHOOOOO!)na smuggled malaking negosyo sa mga kawatan yan lalo na sa padrino sa gobyerno.

So, tama kayo sir undermined ang mga new investments kasi mas pinapaboran yung mga racket at schemes ng mga corrupt na vested interests.

[webmiester]

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.

Well, actually I wouldnt be surprised it Bill Gates bought it from a Filipino for a song, then made it really big... That's the way many of our inventions have gone before... (The florescent lamp, the Armalite, just to name a few)

...Just a clarification on the Bill Gates thing... The way I understood the events was that Bill Gates' Microsoft was commissioned by IBM to develop the MS DOS system to power their new PC. Bill Gates told IBM they already had it produced but in reality he didnt have anything made yet. He had to finish making MS DOS in about a month's time, which he was able to do.

...Now their contract was for IBM to pay Bill gates a small amount for every IBM PC that gets shipped with MS DOS... However, after a short while, Bill noticed that his earnings were very small, and when he went to IBM to ask why, IBM explained to him that only a few of the first PCs were shipped with MS DOS... all the other PCs that came afterwards were shipped with "PC DOS" (An IBM clone of the Bill Gates product)! Thus, Bill only got paid for the few PC which were shipped with MS DOS.

...To compensate, Bill Gates licensed his OS to all the clone PC manufacturers which, combined, eventually defeated IBM! By betraying Microsoft, IBM gave their competitors the crucial OS they needed to compete with IBM. Eventually, when MS DOS produced Windows, the PC DOS offspring was O2 (but it didnt click), and IBM abandones their PC DOS lineage. (And today have also abandoned their PC manufacturing)

...I was told that these events were shown in a movie called "Pirates of Silicon Valley"

...Anyway, back to the topic. Manufacturers of any kind (such as Bill Gates), need to rely on a large market to succeed. Sadly, the Philippine Market is one of the smallest in southest asia. To compound things, the smuggled cars are really much cheaper. Who the heck in his right mind will invest in putting up a brand new engines plant here, when everyone prefers to buy much much cheaper surplus engines?

Kaya a dilemna occurs when those with cash would rather buy established imported brand new cars, and those with little cash would rather buy cheap old surplus engines... The middle ground which local manufacturers are targeting becomes hard to target.

[architect]

The IBM-licensed version of the OS was distributed as PC-DOS, while MS-DOS was licensed by clone/compatible manufacturers such as Compaq, Eagle, AST, etc. The main difference between the two (in their most popular versions) was GW-Basic, which MS originally developed for Compaq, and which was included in the OS disks. IBM's Basic was called BASICA (if I remember correctly) and was part of the firmware. Before IBM and Microsoft signed the joint development agreement that sort of merged the two versions, MS-DOS wasn't that compatible with PC-DOS as it didn't include all the hardware specific utilities written by IBM.

Incidentally, IBM's original sales projection for the IBM PC was an extremely low number that seems exceedingly ridiculous in hindsight. I can't remember now how this played out in the negotiations with MS then for the OS.

[architect]

As for the analogy with the computer industry, we can consider Taiwan's case.

By the late 70s, Taiwan actually had an emergent consumer electronics industry, particularly in television, gaming and calculators. Their approach was to copy existing foreign technology and sell their copycat products inexpensively, and oftentimes with poorer quality (sounds familiar?) Yet by then they were slowly building their base.

At the time, Taiwan also had a budding personal computing industry but this mainly consisted of buying all the parts (sometimes used) and assembling the resultant computers for local sales. (Again, does this sound familiar?)

When IBM introduced its PC in August 1981, significantly with an open architecture platform that allowed add-on cards, several Taiwanese companies jumped in, switching from the Apple II. Note that the vast majority of these companies were SMEs (or at least SMEs then), with a lot working out of their kitchen tables. Because of limited resources, they were not able to cope with the numerous incompatible platforms then (Apple II, Atari, Commodore, IMSAI, Altair, Radio Shack, etc.) and had to choose carefully which ones to support.

But the IBM PC platform quickly became the de facto standard. And soon enough, some of these companies started producing illegal IBM clones, just as they had done with the Apple II. But obviously the illegal products can only be sold in the relatively small domestic market, though a parallel export market was established as well. But room for growth was basically limited due to the illegality.

The Taiwanese government then stepped in and supported the development of a legal reverse-engineered BIOS and system reference guide for manufacturing IBM compatibles. In short, it developed a master plan to manufacture a legit IBM clone. This instantly allowed all sorts of Taiwanese companies, even mom-and-pops, to produce compatible products.

The BIOS was initially contested by IBM but the Taiwanese continued development for new versions, specifically for the newer AT BIOS that came out in 1984. Eventually, the Taiwanese government was able to prove there was no outright copying.

This paved the way for the Taiwanese SMEs to export their products globally, particularly in the US where they gained a reputation for low-cost, affordable prices but not necessarily good quality. But the guaranteed compatibility made life a lot easier for users who are not necessarily technically competent.

Over the succeeding years, the Taiwanese companies improved their quality and their sales growth became exponential. Today, a lot of these companies are acknowledged leaders in I.T. manufacturing and in fact, have collectively become a dominant force.

Just some food for thought - obviously there are some lessons in this history that we can apply to our own little project.

[dprox]

...I was told that these events were shown in a movie called "Pirates of Silicon Valley"

Click back to p.3 ~
http://tsikot.yehey.com/forums/showp...4&postcount=49

[architect]

An rather old but useful article -

From Fortune -

December 11, 2007 -

An Indian Suzuki car will sell in Europe – but not Japan

India’s auto industry has been gaining favor internationally as a source of components, but no-one has showed as much faith in its completed cars as the Suzuki Motor Corporation, which announced today that India will be the only production centre for its planned small “world car”, currently called the A-Star. Production will start at the company’s Manesar plant near Delhi next October and build up to 150,000 a year - 100,000 for export to Europe and 50,000 for India. A slightly modified model will be marketed in Europe by Nissan under a supply-contract between the two companies.

The A-Star will be unveiled at India’s motor show in Delhi next month. It is to be a five-door hatchback and sales will be spread beyond Europe after the launch. A new one litre aluminium engine and manual transmission will be produced in India by Maruti Suzuki and Suzuki Powertrain, a Suzuki subsidiary.

Osamu Suzuki, the company’s 77-year old chairman, would not put a price on the vehicle when he announced it in Delhi yesterday, nor comment on whether the company might produce what is euphemistically called the “one lakh car” planned by Renault and by India’s Tata Motors – the more likely price is around $3,000 or 1.2 lakhs of rupees (Rs120,000) according to Carlos Ghosn, CEO of Renault, who is talking to India’s Bajaj Auto about co-production.

Suzuki visibly brightened up when I asked him about this car. With eyes twinkling, he queried what sort of car it would be. He didn’t quite go so far as to doubt whether if it would have an engine or wheels, but he did say that ”we don’t know about safety and Co2 norms, nor production norms”. Having just explained that the A-Star would have “world-class environmental compatibility and comfort” with emissions “lower than European competitors” he asked “does it have an air bag or not” – knowing presumably that the answer is probably no. Teasingly, he added: “We don’t even know if $3,000 is the parts’ cost or the retail cost”, so it was “difficult to respond” whether he could produce it or not.
The significance of these remarks is that he does not seem to be worried about the “one-lakh” car eating into the 54% market share enjoyed by Maruti Suzuki, the Indian company that started out 24 years ago as a joint venture with the Indian government and is now 54% Suzuki owned. Maruti was a trailblazer when it began because there were no adequate component suppliers, and the country’s potential manufacturing strengths that had been suffocated by government controls. That has now all changed and auto component and vehicle manufacturers are now leading Indian manufacturing industry in terms of quality and, as I said, world acclaim. Suzuki plans $1.8 billion investment in the country between now and 2009

But Suzuki was shy about why he has no current plans to sell the A-Star in Japan. On that he would only say: “Suzuki already has a mini car on sale in Japan so it is not required”. Surely he can’t be avoiding sullying his Japan sales with a “made in India label?

[architect]

From the same site -

October 30, 2007 -
Bajaj near deal with Renault for $3,000 car

[SIZE=2]Rajiv Bajaj, managing director of Bajaj Auto, India’s second largest motor cycle manufacturer, was in a buoyant mood when I met him at the Fortune Global Forum in New Delhi this morning. Fortune invited him to speak at the Forum yesterday about the feasibility of producing a low cost car, but he had to pull out because, he wrote in a letter, “the CEO of one of the world’s largest automotive companies” was visiting his headquarters in Pune and a nearby factory at Chakan. [/SIZE]

[SIZE=2]That CEO turned out to be Carlos Ghosn of Renault, who is talking to Bajaj about producing what colloquially is known as a “one lakh” car, though Ghosn has said he’s thinking of a $3,000 price tag, which is about 1.2 lakhs of Indian rupees (Rs120,000). I checked the price with Bajaj this morning and he replied: “Yesterday he (Ghosn) said $2,500 (roughly one lakh) – he’ll be giving it away free by the end of it!” [/SIZE]

[SIZE=2]Bajaj said today that his aim is “not to produce a mainstream four wheeler” but something that “takes forward our skills and cost structure as a two and three wheeler manufacturer.” It will be a car which is “under four meters long” compared with the more usual five or six meters and will use a “unique breakthrough engine technology” that would “have its roots” in the two and three wheeler area. Bajaj plans to unveil that technology at India’s motor show in New Delhi next January.[/SIZE]
[SIZE=2]Ghosn took some executives from Nissan, which he also controls, to Pune yesterday and the plan, said Bajaj, is a “three-way exclusive global alliance” between Bajaj, Renault and Nissan for manufacturing and marketing. Ghosn, who is also producing the mid-size Logan saloon with Mumbai-based Mahindra & Mahindra, and is planning a light commercial vehicle with Hinduja-controlled Ashok Leyland in Chennai, hopes to finalize the Bajaj deal soon. [/SIZE]

[SIZE=2]There is now a race to see who can produce what fastest for the bottom of India’s four-wheeler motoring pyramid, enabling people to move up faster from scooters and motor bikes - the cheapest car currently on the market is a 23-year old 800cc model from Maruti Suzuki priced at Rs220,000. Ratan Tata, head of the Tata, one of India’s two largest groups, has also been trying to produce a “one lakh car” (about $2,500). [/SIZE]
[SIZE=2]But he has admitted it will cost more and is believed to have failed to produce his dream of a revolutionary vehicle – for example with a plastic body and bars instead of doors, according to some reports. Bajaj also wants to cut customers’ maintenance, fuel, and hire purchase spending to a monthly “cost of ownership” of $150, which he says is not much more than half the cost of keeping a current small car and twice that of a motorbike. [/SIZE]

[SIZE=2]So let’s (see) how he and Ghosn adapt the Bajaj two wheeler engines and three-wheeler auto-rickshaw bodies into a four wheeler – that could be an interesting vehicle.[/SIZE]

[jpdm]

why not create a Pinoy minica?


although Norkis is almost (re: remanufacturing and rebadging old Japanese cars)doing it...

[froshie1]

Dr. Karganilla of UP Manila said that to have an auto industry, the steel industry should be very strong first.

[jpdm]

Dr. Karganilla of UP Manila said that to have an auto industry, the steel industry should be very strong first.

Indeed! That's why it will be a welcome news when the Philippines' first steel blast furnace courtesy of TKC Steel of Tiu group will start producing steel billets from iron ingots...high quality steel compared to steel made from scrap metal.....

Global steel, Mittal is also planning to put up an integrated steel plant in the country in the future.

Nissan is planning to bring in its body stamping plant here maybe because of the news that TKC will start operating its blast furnace at the end of the year...

[Altis6453]

No automotive multi-national company in its right mind will partner with a local counterpart, much less invest in facilities in the Philippines for the country to develop its own automobile. Why? Too many restrictions under the Constitution and other laws regarding foreign ownership of land and participation in certain industries (i.e. retail trade). Sure, a manufacturing concern can be 100% foreign owned, but if the owner can't sell here, it wouldn't make much sense. Add to that the red tape encountered when dealing with government agencies such as the BIR, BOI and BOC, you have an undersirable business environment.

[jpdm]

No automotive multi-national company in its right mind will partner with a local counterpart, much less invest in facilities in the Philippines for the country to develop its own automobile. Why? Too many restrictions under the Constitution and other laws regarding foreign ownership of land and participation in certain industries (i.e. retail trade). Sure, a manufacturing concern can be 100% foreign owned, but if the owner can't sell here, it wouldn't make much sense. Add to that the red tape encountered when dealing with government agencies such as the BIR, BOI and BOC, you have an undersirable business environment.

But how come the auto industry in the Philippines is controlled and dominated by foreign companies (some are 100% owned) if indeed these are the reasons that hinder the development of our own automobile..

CAMPI is a group of assemblers and distributors of foreign vehicles in the country. Ford Motors is owned by the US parent company. There are about seven assemblers either wholly-owned by foreigners or are partly owned with local investors...

The only local company assembler member

Or it is because of the dominance of foreign firms with 100% foreign ownership in the tiny local auto market the main reason why we cannot develop our own automobile....

Almost every aspiring NIC in Asia are doing there darn best of building their own manufacturing capabilities specially their auto industry with the help and support of their government and their people..

In this country, the government, the foreign carmakers and those who can afford to buy vehicles but lovers of foreign cars are teaming up in destroying whatever is left of our moribund native fabricators....either deliberately or by lack of interest..

As an indicator...check the car talk and the Philippine cars thread...very few actually join in the discussion there....

[architect]

Old but interesting article from China Car Times -

China Vs India - who will win in the worlds cheapest car?

To make the worlds cheapest car you obviously need a car, and a car combines (in the basic of senses) a design, an engine, an interior etc all of which need to be safe.



The Tata 1 Lakh car is expected to be launched later this week, but artist impressions pictures have already been leaked to the internet (above, click for bigger pictures) and certain details about the engines have already been released.

That Tata 1 Lakh is rumored to have the option of either a 660cc 2 cylinder petrol motor, and the worlds first low cost 700cc two cylinder common rail diesel engine that was developed by Bosch. In internal testing, the 660cc motor has achieved a very low 1 litre of fuel for every 26km of travel, the diesel version is supposed to be even better.

The motoring press has obviously gone wild over the Tata 1 Lakh car, especially the price, but China has been churning out the worlds cheapest cars for years, albeit they seem to be somewhat inspired by other brands designs.

Some Chinese cars that appear to be among the cheapest on the worlds markets are:

Direct Tata Lakh Competition:

BYD F1 (23,000rmb and up)
Geely AOO (23,000rmb and up)
Chery QQ2 (23,000rmb and up)
Binzhou Pride (18,000rmb - $2700USD)

30,000rmb and up cars (4,000USD)

BYD Flyer
Changhe Ideal

The Tata Lakh 1 seems like a great idea (although we don't know what it looks like yet) get the people to upgrade their motorbike (easily the most common mode of transport in China and India) for a car, even if the car is barely a bit bigger than the motorbike. One more interesting thing about the Lakh 1, is that it appears to be rear wheel drive, with the engine in the boot, where as Chinese super cheap, super minis all appear to be front wheel drive and front engined.

What do China Car Times think of the Indian car market, the Chinese one appears to be further ahead, but TATA are surging along.

[architect]

From Wired Blog -

With China Rising, Detroit Needs Engineers ASAP

By Keith Barry August 15, 2008 | 8:22:57 AM

Suggesting that a domestic industry is about to be eclipsed by foreign competitors is always risky, but that's just the brave card Dr. Leo Hanifin played when he told Detroit that the best automotive innovations will be stamped "Made in China" if we don't soon see a fresh crop of talented American engineers.

Some will scoff at the suggestion Hanifin, dean of the College of Engineering and Science at the University of Detroit, made during a seminar hosted by the Center for Automotive Research. After all, Chinese cars tend to be licensed copies of more established brands (China made 1980s-vintage Audi 100s until 2006), cheap unlicensed knockoffs of popular cars or truly odd vehicles like the "Book of Songs" EV (pictured) that one manufacturer brought to the Detroit auto show this year. Many of these doubting Thomases undoubtedly had parents who felt the same way when a little company called Toyota brought the Toyopet to America in 1957.
Hanifin says it's best to head these international engineering challenges off at the pass, especially when Michigan's seen a double-digit decline in engineering students. "More and better-educated engineers are needed if our nation and its auto industry are to thrive or even survive," he says.

Hanifin says there are 10 times as many budding engineers in China, where 45 percent or more of university students pursue degrees in that field. Perhaps nowhere is the deficit more noticeable than in Michigan, where enrollment in university engineering programs fell 13.4 percent in seven years. The decline has come even as schools nationwide saw enrollments climb 9 percent. "This precipitous drop is clearly linked to layoffs and poor performance within the domestic auto industry," he says.

But in car-crazy China, an engineering job in the auto industry is pretty desirable, so the country's emerging auto industry is getting some of the best new talent.

Korean electronics manufacturer Samsung is a good paradigm for the Chinese auto industry. Once relegated to the clearance aisles at Bradlees and Montgomery Ward, Samsung was known for cheap imitations of superior Japanese and American products. But after extensive investment in research and development and a thorough rebranding, Samsung became an industry leader and usurped Sony as the innovative manufacturer of choice in flat-panel televisions and cell phones.

Landwind, Brilliance and Chery are a few years away from Samsung status, but American engineers must keep Chinese manufacturers in their sights. Hanifin suggests an automotive equivalent of Silicon Valley where innovators gather to develop and test their best ideas. CAR's own Program for Automotive Labor and Education is a good example of collaboration among automakers, universities and training grounds for younger car enthusiasts. With auto-industry financed scholarships and guaranteed job placement, programs such as PALE hope to encourage car-loving teens to stop gluing spoilers on Civics and think about careers in automotive engineering and design.
Post updated 10:45 a.m. PDT.
Photo: Chuck Squatriglia/Wired.com

[alwayz_yummy]

i think we pinoys can do this. for me a di sa pagmamayabang, tayo mga pinoy has a more resourceful mind. eto reading and comparing chinse car brouchures to japanese models.

just to came up with the idea, and of mix-matching of the best specs suited for the filipino taste.

[safeorigin]

like playing dress ups?

[alwayz_yummy]

parang ganyan naman ang ginagawa nila e... example lang natin ang foton, FAW, jinbei,etc.. old models naman gamit nila, not the current.

ang prob natin, wala tayong sariling engine stamper para yung makina, eventhough may source, in the registration/stamp iba siya sa source.better kung may goverment suport/sponsor tayo ng engine mold and mga press mismo.

[roadstar31148]

hi,,,i'm an aussie coming to your country to look at setting up a hotrod and custom motor vehicle manufacturing business to the asian market,,you can see my web site which will have an upgrade shortly,, www.flemingjrod.com ,,,i believe asia is ready for top quality hotrods and customs,,,i have 3 design hotrods,,a sports car ,,and i plan to build a efigy copy,,,,,,i would like your thoughts on my plans,,,,,cheers

[architect]

*roadstar31148,

Of course as a Filipino I am delighted that you are considering setting up shop in the Philippines. But as a fellow entrepreneur, I would strongly advise that you undertake due diligence in both identifying the requirements and available tax holidays (and exemptions) especially if most of your products will be exported and in determining the various nuisances inherent in local custom car fabrication.

While a lot of Filipinos are master craftsmen in their respective trades, well at par with foreign counterparts, their approach can often times be a source of frustration for both clients and employers. One glaring example is the inability of most to read CAD drawings. Instead they would much rather work off a scale model. Standards in both dimensions and design is often an alien concept as well.

That said, if you are able to organize a cohesive team of master craftsmen who can follow your instructions to the letter, then given the lower scale of wages and living costs, you will have a very cost-effective production outfit.

My suggestion would be, if you haven't tried out local skills (and temperament ), to contract an existing shop to produce one of your designs first. That way, you will be able to observe first hand both the advantages and disadvantages of locating your shop here and decide for yourself.

Hope this helps. And good luck.

[wildthing]

if I were to follow the chinese and indian auto makers and have to make a small car...i'd rather make one of these instead :

mini corvette


mini audi suv


mini lamborghini