From the Publisher: Quality is Key to Chinese Competition

February 1, 2007
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By the time you read this column, the North American International Auto Show will be complete. Two stories from the show point to the state of the U.S. auto industry and the role China may play in the global automotive market.

On January 8, U.S. and Canadian journalists announced that the Chevrolet Silverado and the Saturn Aura won the 2007 Truck and Car of the Year honors. These awards are certainly some level of affirmation for General Motors. Last year’s winner was Honda, in both car and truck categories.

On January 9, it was reported that Chinese automaker Changfeng Group was optimistic about its ability to enter the North American auto market. Some experts say they are overly optimistic. Bill Pochiluk, president of research firm Automotive Compass, says that Changfeng’s designs and body structures are 10 years behind other world automakers. He says that they need foreign partners for guidance in design, production techniques, marketing and distribution.

While design is debatable as to what constitutes “improved,” production improvements, particularly quality, can be more objectively measured.

Chinese manufacturers need to increase the quality of their products, on a consistent basis, if they are to compete with Europe, Japan and North America in the automobile, aerospace and other industries where quality is critical. Consumers, including Chinese consumers, expect and demand such quality. Both General Motors and Ford reported 2006 sales increases in China of 32% and 87%, respectively, selling a combined 1 million vehicles during that time. While these companies may suffer from the misperception of poor quality in the United States, Chinese consumers experience the products as superior to autos made by Changfeng and Chery Automobile.

Anecdotal evidence indicates that quality, while drastically improving inside Chinese manufacturing companies, still remains a challenge. As with many U.S. manufacturers, China is in need of trained people for quality and manufacturing positions. However, whereas in the United States the challenge is to encourage people to choose a career in manufacturing, in China it is often a challenge to keep already “encouraged” employees to stay at the same job-stealing trained employees through offers of increased pay is reportedly commonplace in China.

DaimlerChrysler has partnered with Chery Automobile in a strategy to provide small cars for sale in North America. Presumably Chery will gain experience in the areas, including quality, which Pochiluk identifies as being critical for Chinese automakers.

We will do our part in improving quality education, as well. Quality Magazine will finds its way, with several special Chinese-language issues, to an anxious Chinese manufacturing audience during 2007, with more to come later.

China is already a major global economic and manufacturing force. It will secure its position as a global leader if it continues to look, and be open, to opportunities that help Chinese manufacturers compete on a quality basis.

What is your view of quality in China? Let me know at williamst@qualitymag.com.

 

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