What is the Chinese way out for 3 global automakers?

Shanghai, September 10 (Gasgoo.com) Fiat Auto, the number-one carmaker in Italy, came to China eight years ago; Chrysler LLC, one of the three U.S. car giants, has operated in China for about 20 years; and Mitsubishi Motors, a famous Japanese carmaker, relies on its auto power system, rather than its model brand, for its developing in China's auto market.

The three global automotive brands have lost parts of their grounds in China and their prospects look gloomy in the world's second largest auto market. They have the same fate in the China market, but their response and solutions to their failure here may be quite different.

Fiat is seeking opportunities for revival in China. The Italian carmaker has kicked off its recovery drive in the Chinese market while its operations in other markets of the world are performing much better. Since its joint venture with Nanjing Auto terminated at the end of last year, Fiat has kept on fulfilling its obligations in China: setting up the financing company, supplying after-sales support to 160,000 Chinese owners of Fiat cars, and importing cars of three Fiat models for sale in the Chinese market.

When Fiat's global growth is at its height and China's auto market is growing slower, Fiat has not given up the China market but is instead seeking new local partners for making Fiat models for Chinese buyers. The Fiat brand is still trying to boost its presence and prestige in China.

In the Unites States, Chrysler is gradually dropping out of the top three ranks of carmakers, even if U.S. presidential hopeful Barack Obama has pledged multi-billion dollars to support the weakening auto industry. In China, Chrysler's withdrawal from Beijing Benz-DaimlerChrysler (BBDC) is likely to discontinue the making of Chrysler 300C and Chrysler Sebring models in the joint venture. This will deal a fatal blow to Chrysler's presence and growth in the China market.

Because Chrysler has no better capital advantage over Fiat, Guangzhou Auto would like to choose Fiat as its partner, and Chrysler’s tie-up with Chery Auto, if possible, would not go beyond the OEM level. Chrysler, now seeing the slow sales of both its passenger and commercial cars, has an uphill battle to fight in its search for a suitable new Chinese partner.

Mitsubishi Motors knows that its partnership with Southeast Motor is coming to an end, as Fiat did with Nanjing Auto one year ago. Many dealers of Southeast-Mitsubishi vehicles are planning to shift their business focus and Mitsubishi has to worry about how to ensure the after-sales services for its Chinese customers. Meanwhile, the Japanese carmaker's cooperation with Changfeng Motor is also on the rocks.

With its dual-brand operations with the two Chinese automakers to fall apart, Mitsubishi would have little chance of successfully reversing its failing sales in the Chinese market. What will Mitsubishi do if its market share in China continues to dwindle? It remains to be see what different way out Mitsubishi, as well as Fiat and Chrysler, will find in China.

Some industry experts said that, to survive the fierce competition in the Chinese auto market, global automakers must have three driving factors behind their success: strong local carmakers as their partners, local production of a series of vehicle models with precise market orientation, and competitive supply system in the country.