For U.S. dealer, proceed with caution

SHANGHAI  -- I'm from San Antonio, Texas, and grew up seeing Red McCombs dealerships and watching the San Antonio Spurs play professional basketball. McCombs owns the Spurs.

Back then, the Spurs usually made it to the playoffs, but didn't win the whole thing. Last year, they won the world championship.

But McCombs must realize that owning a winning basketball team and winning in a partnership with a Chinese company are very different matters.

For Brilliance China Automobile Holdings Ltd, partnering with McCombs was, well, brilliant. Brilliance and McCombs agreed to establish a joint venture to provide dealership services in China. Chinese companies lack expertise in the most profitable areas for dealerships such as insurance, extended warranties, and leasing. McCombs has that expertise in abundance.

Red McCombs should heed the words of Albert Gallegos, director of international affairs for the National Automobile Dealers Association. Do your due diligence when getting involved with a Chinese car maker.

Brilliance is doing well now selling cars in China. But that is a very recent phenomenon.

In the past, Brilliance produced cars that sold poorly in China and failed crash tests in Europe. It was also taken over by the local government and had a chairman who was ousted, faced arrest, and fled the country. That ex-chairman is now living somewhere in the United States, according to reports.

Speaking in generalities can be hazardous. But in 10 years in China as a business journalist, I've heard stories about the business culture in China that would shock many Westerners.

Agreements that the Westerners believe are finalized are sometimes considered optional by the Chinese side, depending on its needs.

Business planning can be rudimentary. So, for example, a supplier might find that an order is reduced dramatically because of overly optimistic estimates by a Chinese customer.

As for Brilliance, people whose opinions I respect speak well of the management. And it is doing well now. But its record of success is too short to assume that the past won't repeat itself.