competitors, said A. Kumar Galhotra, Ford's vice president for
product development in Asia, the Pacific region and Africa.
So far, the quality of the best Chinese cars has been well short of their Western counterparts, leaving even many Chinese customers dissatisfied.
When J. D. Power & Associates, the consulting company, surveyed new-car buyers in China last year, it found that they had reported 232 quality problems for every 100 Chinese-brand cars purchased. For cars carrying international brands, 131 defects were reported for every 100 cars.
Jacob George, the managing director of J. D. Power's China division, said that Chinese automakers had been steadily closing the gap with their overseas rivals since his company began doing annual surveys in 2000. If trends continue, he predicted Chinese manufacturers would catch up in quality by 2018.
The shortcomings of Chinese cars tend to lie in basic designs. Chinese automakers spend an unusually low share of revenue on design, focusing on ruthless cost-cutting instead.
J. D. Power also surveys buyers in China on how appealing they find their cars after three months of use. Chinese brands consistently score worse than international ones, particularly in categories like engine noise, driving dynamics and seating comfort, Mr. George said.
In the area of safety, Western consumers increasingly demand top ratings that Chinese automakers have had scant success in producing so far. But safety is less important to buyers in emerging markets.
Ford's market research found that as recently as 2006, safety ranked last among the nine most important attributes for Chinese car buyers. Although safety has moved up to sixth, the exterior appearance of a car was the top priority for buyers then and now.
Chinese regulators are putting pressure on Chinese automakers to strengthen their designs. They have begun issuing star ratings for safety to cars sold in China, after copying the test methods from the National Highway Traffic Safety Administration in the United States.
But the fact remains that consumers in China and other emerging markets generally focus more on price. And Chinese automakers are low-price leaders around the globe, selling new cars for as little as half the price of Western rivals. Emerging markets tend to have relatively few late-model used cars to compete with new subcompact cars.
Chile, though it is a small market, offers a window into the potential of Chinese brands. While Chinese companies barely registered there six years ago, today they claim 10 percent of all passenger vehicle sales and 19 percent of all commercial truck sales. This unparalleled growth was bolstered by a lack of local manufacturers and a near absence of trade barriers, said Francisco Errandonea, head of equity research at Santander GBM in Santiago.
"Because of this openness, many brands see Chile as a test market for the region and a gateway to Latin America," Mr. Errandonea said.
In Brazil, the rapid growth in Chinese car sales led the government to announce in September that it was raising import tariffs on cars 30 percentage points, to as much as 55 percent, to protect local subsidiaries of multinationals. Brazil went from being one of the top three export markets for Chinese cars last year to not ranking in the top 10 so far this year.
Over all, China exported 850,000 vehicles last year. That number was dwarfed by Japan, which exported 4.4 million cars and trucks last year, and South Korea, which exported 3.2 million. But China is starting to catch up, with exports up 50 percent from 2010.
Despite the extensive presence of Western brands and factories in China, top executives at multinationals said they had no plans to export significant numbers of their Chinese-made cars.
"I'm not saying we could not export, but there is no need to export," said Carlos Ghosn, the chairman and chief executive of Nissan and its corporate sibling, Renault.
For now, multinationals are fighting for greater market share in China, the world's largest auto market, with 18 million cars and light trucks sold last year.
Indeed, as Chinese buyers become more prosperous and demanding, Chinese brands are finding that their own country is one of their most challenging markets. Chinese automakers held 28.7 percent of their home market for passenger cars in the first five months of this year, down from 32 percent of the market during the same period last year.
A few of China's biggest cities, including Beijing in December 2010 and Guangzhou last weekend, have imposed stringent limits on the registration of new cars, cutting local sales in half almost overnight. Buyers who can obtain scarce license plates are more likely to put them on higher-priced cars, and these tend to be made by multinationals, not Chinese automakers.
Chinese auto executives said that while they were intensely interested in other emerging markets, their top priority was the emerging market in their own backyard.
"If we want to be No. 1," Mr. Wang of Great Wall said, "we should be No. 1 in China first."
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