Carmakers In China Rev Up As Industry Shifts East China is now the world's largest car market, and a crucial one for Detroit companies. Chinese consumers bought 18.5 million vehicles last year, and foreigners, especially Americans, have played a key role in developing the industry. But that's changing, as Beijing tries to strengthen domestic carmakers.
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Carmakers In China Rev Up As Industry Shifts East

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Carmakers In China Rev Up As Industry Shifts East

Carmakers In China Rev Up As Industry Shifts East

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Last week, Ford announced construction of its fourth assembly plant in China. That's the world's largest auto market now, and the bid for China's business is evident this week at the Beijing Auto Show.

Ford is not the only company looking to expand in China. As we reported yesterday, GM plans to open 600 more dealerships in that country, where it already sells more cars than in the U.S.

NPR's Frank Langfitt recently met with long-time American auto executives in China.


FRANK LANGFITT, BYLINE: Every month, a group of auto execs gathers at a bar in the heart Shanghai.


LANGFITT: They drink beer, swap industry info and talk about the wild ride that is China's car market.

DAN COLLINS: Well, Shanghai is the new Detroit. They make a lot more cars now in Shanghai than they do Detroit.

LANGFITT: Dan Collins is from Port Huron, Michigan, northeast of Detroit. His great-grandfather tested cars for Henry Ford. Collins came to China in 1998 as a student from Michigan State. Back then, Chinese bought just a million-and-a-half vehicles annually. Last year, that number was 18.5 million.

COLLINS: You talk to anybody in the automotive industry, it's all China, China, China.

LANGFITT: Collins' career is a kind of a classic, expatriate Horatio Alger story here. He hired on in China with Delphi, the Michigan-based auto parts maker, which was then the world's largest. Collins learned Chinese on the factory floor and rode the wave of the country's breathtaking economic growth.

COLLINS: Basically, I originally planned to come for three months, but then I became a manager in only a year. I was an executive in less than five. So before I was 30, I was an executive in a major Fortune 500 company. So that was something I never could have done in the United States.

LANGFITT: Today, following a path neither he nor his grandfather could have imagined, Collins is now the 38-year-old CEO of a Taiwanese company that makes brake discs. He runs a factory in the city of Ningbo, just south of Shanghai, where he's the only foreigner among 300 employees. Collins says what makes China such an exciting place to work is the pace, challenge and unpredictability.

China's industrial culture is still pretty raw, so on any given day, you never know who you're going to meet.

COLLINS: I got into the scrap yards to negotiate some deals, and they're basically run by local mafia bosses. And you go to a meeting with him, and he doesn't have his shirt on. As I'm in the meeting discussing with him the pricing, he puts one of his workers in a headlock and wrestles him out the door. These are the kinds of things, you know, that happen only in China.


JACOB SHENKEL: My name is Jacob Shenkel.

LANGFITT: Shenkel worked for Delphi, as well. He left after the company went bankrupt in 2005. Later, he returned to work for an old Delphi subsidiary that made steering systems. Only now, in a sign of the times, the division wasn't owned by Americans anymore. It had been sold to the Chinese government.

SHENKEL: If three, four years ago you had said Chinese companies were going to start to buy U.S. assets, you would have scared people to death, because they were going to clean house.

LANGFITT: But Shenkel says working for a government-owned company here isn't so bad. Chinese companies often buy foreign ones for technological know-how and to learn from foreign managers. Shenkel says the Chinese government serves as the company's board of directors, but leaves management pretty much to the Americans. He says his company and some auto joint ventures here increasingly feel like hybrids.

SHENKEL: What's Chinese and what's foreign is blurred more than ever. And if you take, like, Shanghai Automotive and General Motors, you know, it's hard to tell sometimes who's invested in who, or who's partners how with what.

LANGFITT: Shenkel and Collins embody the shift from West to East. But foreigners are wary of working for Chinese car companies.

MICHAEL DUNNE: It's tough. Many have tried, and most have said surrender.

LANGFITT: Michael Dunne is the author of "American Wheels, Chinese Roads: The Story of General Motors in China." He says the culture inside a Chinese auto firm can be combative, opaque and baffling.

DUNNE: You've got to get ready for a fight, a battle every day, but time and time again, China's culture digs in and more or less spits them out.

LANGFITT: After incredible 33 percent growth in 2010, China's auto market has cooled. And there are some unsettling signs for foreign companies. Beijing is considering restricting government auto fleets to Chinese cars to help boost their market share. Again, Michael Dunne.

DUNNE: There's no doubt that China wants to have its own cars with its own brands and be the car factory for the world.


LANGFITT: Back at the bar, another pizza is up, and Shenkel is talking about the future. I ask the question expats always ask in China: How long do you think you'll stay here?

SHENKEL: I'll probably be here the rest of my life.

LANGFITT: It makes sense: Shenkel's from Chicago, but he got his MBA in Shanghai. He's married to a Chinese woman, and almost all of his professional experience is here, where the car market is expected to grow for years to come. Frank Langfitt, NPR News, Shanghai.


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