Yes, China is on track to become the world's largest single car market.
And yes, one or more native Chinese carmakers will likely become fully competitive in the global market within 10 or 20 years--as Hyundai, Honda, and Toyota have done over time. But there will be fits and starts along the way, and the road will be tough.
Brilliance BS6 crash test, after modifications, 2007Enlarge Photo
Brilliance BS6 scores just one star in latest crash testEnlarge Photo
Brilliance BS4 sedan headed to GermanyEnlarge Photo
Case in point: Consider Brilliance, China's ninth largest automaker.
While it may be BMW's manufacturing partner in China, it recently halted sales of its BS4 and BS6 sedans in Europe after they met with resounding indifference from buyers in Germany, Italy, and other countries.
Brilliance had hoped to sell almost 160,000 cars over a five-year period throughout Europe. But its final sales were a mere 502 units, spread across three model years: 2007, 2008, and 2009. The company's total 2009 sales were 350,000, almost entirely in China.
The company's former European importer told Automotive News Europe that Brilliance refused to subsidize the price of its cars, suggesting instead that the distributor make up the difference if it wanted to lower prices--which it refused to do.
Engineering cars to meet the safety and emissions regulations, and equipment and build-quality expectations, of North American and European buyers is a challenge that will take years for Chinese carmakers to overcome, industry analysts say.
Moreover, their home market is growing so fast that they have little need to export, unlike Korean and Japanese manufacturers with relatively small domestic sales.
Still, Brilliance has had a particularly rocky time of it. The company originally intended to export several models to Europe, and even laid plans for a U.S. launch in 2008.
Its first export, the BS6 sedan, badly failed a mid-2007 crash test by German auto club ADAC. The company speedily re-engineered the car, improving its performance enough to give it three stars on the front and side impact Euro-NCAP tests performed later that year.
In a remarkable display of corporate courage, Brilliance issued a video that September that showed both the old and new crash tests, presumably to highlight the improvements.
But it proved no use. Without competitive products and a significantly lower price, European buyers--often more brand-loyal than their North American counterparts--simply sniffed and turned away. Game over.
[Automotive News (subscription required)]