- The Washington Times - Tuesday, June 2, 2009

BEIJING | With American car makers on the ropes, speculation has run high that China might soon take over the world auto market, but analysts say China’s technological base and consumer mentality makes that unlikely.

More than two-thirds of the cars sold in China are foreign brands; General Motors Corp., which declared bankruptcy Monday, has the largest share of the Chinese market — more than 12 percent last year or nearly 1.1 million cars.

What’s more, Chinese cars need to become relevant in their own market before they can be taken seriously abroad, said Bill Russo, former vice president of Chrysler LLC’s Northeast Asia office and now head of China-based auto industry consulting firm Synergistics Ltd.

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“It’s like a giant baby,” he said. “It’s really big, but it hasn’t matured yet.”

Big numbers — like the record 2.7 million vehicles sold in China in the first quarter, a 4 percent jump over the same period last year — have led to speculation that China’s production will soon surpass Japan’s.

Although China’s car manufacturers may soon lead in quantity, specialists say, they have a long way to go in terms of quality.

China could compensate in part by buying up ailing foreign brands such as GM’s Saab or Ford’s Volvo, but that would have a bigger impact on the domestic market than on global sales.

“An investment in Saab or Volvo will give Chinese manufacturers a massive boost in technology, which would push them to the forefront of the Chinese car industry within a very short time,” said Ash Sutcliffe, who runs the Web site China Car Times.

Before a Chinese car company can become a global leader, however, the domestic market needs to consolidate, Mr. Russo said. About 20 companies now account for 95 percent of the market and 130 more hold about 5 percent.

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