A brief history lesson on the Chinese automotive market.

Truth be told, I’m already anticipating the flood of comments and messages we’ll be getting as a result of this article. Growing up, as a ‘90s kid, I honestly had no knowledge of Chinese cars or manufacturers. As far as I was concerned, anything I ever saw on the road was Japanese, American, or Korean. Sure, there was the usual odd Italian and a good number of German cars, as well, but for the most part, almost everything was from the Land of the Rising Sun. Heck, even our garage only ever had one German car, a Volkswagen Beetle, and the rest were Japanese until we very recently got on the French side for the past few years.

During the late 2000’s, players in the Chinese automotive industry were looking at exploring the international market. It’s interesting to note that in the ‘80s and ‘90s, the Chinese automotive scene was very limited in production and scope, with earlier products being commercial trucks in the 1940s. In the 1980s, China was importing a great number of vehicles from Japan, the United States, and Russia (Soviet Union at the time), hitting almost USD 3 billion in imports in the year 1985 alone. Those numbers (and spending issues) are what caused the Chinese government to impose tariffs and increase customs duties on foreign goods. They even put a stop to automobile imports for two years.

For the next decade, China would try to increase local automobile production by entering various joint-venture agreements. In 1983, American Motors Corporation (AMC) had signed a 20-year contract to produce their vehicles in Beijing. In 1984, Volkswagen also signed a 25-year contract to create their passenger cars in Shanghai, and even Peugeot agreed to a passenger car project in the city of Guangzhou. While the vehicles came from different countries, the technology sharing was very limited with China, and the vehicles would be assembled in-country. This would go on until the present, with local companies and players wanting to get a slice of the pie. Some would originate from state-owned companies, such as BYD Auto, Chery Automobile, and Changfeng Automobile, and others would be privately-owned, like Geely Automobile and Great Wall Motors.

Currently, the top four manufacturers are state-run, and their production numbers are in the several millions for each. There’s Shanghai Automotive Industry Corporation - General Motors (SAIC-GM), Dongfeng, FAW, and Chang’an. SAIC-GM, if you haven’t guessed it by now, operates in a joint venture with General Motors, and is the largest producer of vehicles in China, totalling close to 7 million as of 2017. Dongfeng is second with 4.1 million vehicles, and has partnerships with Honda, Nissan, Infiniti, PSA Peugeot Citroën, Renault, and Kia. FAW has ventures with Audi, General Motors, Mazda, Toyota and Volkswagen, and totalled 3.3 million vehicles in 2017. Chang’an is the fourth largest at 2.8 million vehicles, having agreements with Suzuki, Ford, Mazda and PSA Peugeot Citroën. All these manufacturers produce vehicles for different brands, while offering their own lineup to the Chinese market, as well.

Those numbers are all good and impressive, but for us Filipinos, our first encounter with a Chinese brand would probably be in 2008, with brands like Chery, Lifan, and Chana. Their arrival was met with mixed reactions from the motoring community. Sure, they’d be offering cheaper alternatives when compared to the Japanese, but there were questions about build quality and safety. As a market that has been raised primarily on reliance on brands like Toyota and Honda, a new player that is set to challenge the status quo is almost always immediately met with a barrage of questions. It didn't help that, at the time, some of these companies have been battling legal issues with longstanding manufacturers for ripping off designs and technology.

Every distributor that desires to bring in Chinese vehicles in the Philippines seems to have met with a set of challenges that, while aren’t necessarily unique to the brand, are significantly harder than any other manufacturer. Marketing will be an uphill climb, parts availability and warranties will be a main factor, let alone the vehicle being solidly built and without glaring issues. It’s hard to win over the hearts and minds of Filipinos if the initial product offered 10 years ago didn’t hit the right notes, and left an undesirable image in our minds.

But, of course, it would be foolish of them to keep trying if they didn’t learn from previous mistakes. In the recent years we’ve seen new brands offering completely new models and variants that have seen success in a competitive market like China. Volkswagen’s all-out assault of new models is an indicator of this, offering German engineering at affordable price points. Then you have top-selling brands like GAC, JAC and BAIC launching new cars and pushing for new dealerships with fleshed out service centers. Just like how Korean brands took some time to gain a foothold in our country, it’ll take some time before China cars start becoming a norm on our roads. The amount of money and investors that are willing to enter our market is a good sign that our automotive market is as receptive as ever; the new players just have to do their best to offer quality and service, and remain flexible to offer products that fit our market and ride the trends. Win us over with aftersales, attractive prices, well-built vehicles, and sooner or later, Chinese cars will be considered instead of outrightly dismissed. It’s a stigma that’s hard to cure, but it is a slow and steady process.

What was apt, however, is that I recently drove a JAC S2 over a few days, and I found myself pleasantly surprised. It was a decent driving experience, tackling NLEX, SCTEX, SLEX, and braving EDSA rush hour traffic. There were no major flaws or questionable materials from what I could see, but, of course, time will tell. I was never a critic of Chinese cars to begin with, but getting behind the wheel of one with an open mind can make a huge difference in changing perceptions. That was then, and this is now; we just need to find out which brand or brands will finally cleanse that palate.

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