U.S. auto giants' meltdown may hurt China

Shanghai, December 3 (Gasgoo.com) Although the current sufferings of the three U.S. auto giants - General Motors, Chrysler LLC and Ford Motor - have not obviously affected their joint ventures or operations in the China, the meltdown or bankruptcy of the three giants, if materialized, will do more harm than good to China's auto industry and even the Chinese economy as a whole.   
 
The sales of China-made GM vehicles have surpassed one million units a year and Ford has also annually sold more than 200,000 vehicles (excluding those of the Mazda-brand) made in China, together accounting for 10% market share in the country. Shanghai GM, Changan Ford Mazda and SAIC-GM-Wuling all rank among China's top makers of passenger vehicles. No doubt, many American auto elements have spread deep into the bloodstream of China's auto industry.

If GM and Ford collapse, their joint ventures in China will be heavily hurt by the withdrawal of foreign capital, disruption of new product model supply and technology support, and the lay-off of numerous employees, which will also severely affect the upstream and downstream links of the auto industry.

Of the global giant companies that have been operating in China, GM and Ford are seen as the most liberal and broad-minded because they would not close their technologies to Chinese companies (as Volkswagen would do) and instead would use their latest know-how to support and help their Chinese partners as much as possible.

For instance, the Pan Asia Technical Automotive Center (PATAC), a 50:50 joint venture between GM and SAIC, has become a top one incubator for the auto technological elite in China and is instrumental in SAIC's own-brand research and development. The technical support of Ford has also played important role in the development of its partners Changhan Auto and Jiangling Motors.

Without the support of the advanced auto-making technologies from GM and Ford, China's auto industry would lag behind several more years behind the world's average level. The emerging of Chinese automakers in the past eight to ten years has largely relied on the technologies of and partnerships with global auto giants such as GM and Ford. Chinese auto companies still have much to learn from these giants.

However, GM, Ford and Chrysler are still looking to China, the world's second largest auto market, for their global growth. Their Chinese ventures have been operating undisturbed and their further investment and new product projects in China are moving ahead as planned. GM China had sold 913,000 vehicles in the first ten months this year, up 9.1% year on year, and GM has promised to launch at least 10 new car models to the Chinese market over the next two or three years.

Chrysler has been seeking new partners in China after it dropped out of Daimler AG's joint venture with Beijing Auto -- Beijing-Benz DaimlerChrysler (BBDC) and recruiting auto professionals in the country. For the China market, Chrysler has planned an extensive product lineup and more positive operation pattern for its recovery in China by 2010.

The three U.S. auto giants have built up much experience and might over their long history and it is hard for them to break down in the current crisis. The American government and people would not like to see the renowned symbols of their proud industry disappear before their eyes.

Americans and Chinese alike strongly hope the troubled GM, Ford and Chrysler will strive and survive to rise again like a phoenix from the ashes and to flourish in China as well as in their home market the United States in the years ahead.