US professor on China's auto industry development

CHICAGO - Investing in brand building and communication and being patient. This is the proposal a US professor gives to China's auto industry development.

Puneet Manchanda, professor of marketing at Ross School of Business of the University of Michigan (UM), said in an interview with Xinhua that there are three things Chinese automakers need to do: Take a long view; innovate and invest continuously in features, quality, design and reliability; and find segments that are not crowded and target those.

China is the world's largest auto market in terms of production and sales at present. But "being big but not strong" is the state quo of China's auto industry development.

To change the situation, some Chinese automakers are seeking to explore overseas market.

Guangzhou Automobile Group (GAC) Motor Co Ltd headquartered in Guangzhou, South China's Guangdong province, announced when attending the 2018 North America International Auto Show in Detroit in January this year that it will begin selling vehicles in the United States at the end of 2019.

The Chinese automaker is now busy studying North America market and consumers, in efforts to determine products and brands to be sold and the operation mode in North America.

"The US is probably the world's most competitive car market and it takes a long time, around 20 years, to gain wide consumer acceptance," Manchanda told Xinhua. "The US car market is a moving target and the Chinese brands will have to stay ahead of consumer trends."

GAC seems to have realized this. To keep abreast of the international auto market, GAC Motor has listed developing new energy car as one of its top priorities, and has so far built two technological routes of plug hybrid electric vehicle (PHEV) and pure electric vehicle (EV).

"Quality is the foundation for GAC Motor to enter North American market." "With this in mind, GAC Motor never compromises its quality in market competition. Everything, say agenda, sales, and cost, must give way to quality," GAC Motor senior management told Xinhua in an interview.

Manchanda also suggests Chinese automakers to find market segments which are not too crowded. He goes further pointing out that as many US manufacturers are moving out of small cars and SUVs, Chinese brands could fill this gap if they are not expecting to make profits right away, "to get some mindshare and build their networks."

Other segments such as small activity based EVs of mobility, and golf carts for gated communities are also where Chinese automakers can have the highest impact.

Finding right market segments with their price points, "Chinese brands can do well in price sensitive markets such as India, Indonesia, and some African markets," Manchanda said.

Manchanda holds that it would be useful for Chinese automakers to "look at case studies of the Korean car brands in the US over the last 20 years." "They started from a similar position and now they are solid players."