Going up steadily? not really.... it's skyrocketting

China auto market is still growing at a super rate. Its the second largest auto market in the world after US last year. The calculation included 160,000 imports unit though. If those cars are excluded, Japan is ahead. Considering the already saturated auto market in Japan and the low automotive penetration in China, China is set to clearly overtake Japan this year even after imports are included. It's not a small wonder to expect China to jump ahead US in 3-6 years time. After all, US has reached the full maturity of its automotive penetration. After all, China is at the bottom of the world in terms of car penetration, about 1.14 per 100 households. The highest penetration is reported at Shenzhen, a "huge" 18.5 units per 100 households (http://english.people.com.cn/200208/02/eng20020802_100799.shtml)

In 2006, local indigenous brand sedans is reported to have 25.7% of market share. Local share of commercial vehicle in terms of buses and trucks has been hovering around 95%, for the past 3 years (http://www.industryweek.com/ReadArticle.aspx?ArticleID=14000). The sedan share might be able to increase by ~5% this year owing to the launch of new models from the local brands and the increase in product quality. After a period of design copying, close to design infringement, the local brands are using more and more local content and design in their cars. The design is further apart from what it's originally copied and more creative and original designs have surfaced. Coupled with increasing quality as Chinese brands push for overseas market (even US), it's not far fetched to expect more Chinese brand to be displayed in cars around the world.

Auto Shanghai 2007 can be used an indicator of China's gaining prominence in auto industry. The show features 1,300 participants from 21 countries, providing a show are aof 140,000 square-meter. Local brands (inclusive of foreign join-ventures) put up 69,5% of the 1133 units displayed. The show recorded 500,000 visitors from 108 countries!!! (http://www.mobilku.com/). Even BMW and GM chairman won't want to keep away from the press day, including Vice Chairman of Toyota Motor Group and Executive VP of VW Group. Surely, it's not hard to imagine more high profile auto personnels and more cars to be featured in the same show next year.

It might be wise for China automaker to apply Toyota Way and look real carefully on their design and quality before they take the world seriously. Auto quality is not something that anyone can bluff themselves with. One mistake and low quality car marketed anywhere in Europe or US can easily spin China brand off course and never be even side-glanced any more. After all, a car does cost a lot and noone would ever want to take too much risk with high end items. Perhaps Lexus introduction method in US can be learned at apply. It's not a good idea to ignore GM and Ford mistake in mass production with relatively quality in the past. Thank God they have learned. GM's chevy does seem to have nice grills nowadays.