Beijing has come to Detroit's backyard
 | Michael Dunne is president of Dunne & Co. and author of American Wheels Chinese Roads: The Story of General Motors in China. |
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When I come to the United States for a visit, the question I am most often asked is: When will Chinese automakers come to American shores?
My answer takes most people by surprise: "China's auto industry is already here," I say. "You just don't notice it. The Chinese are hiding in plain sight."
But rather than export boatloads of small, thrifty cars to the United States -- as Japanese automakers did -- China is building a spider's web of commercial relationships.
Consider BeijingWest Industries, a global company with operations in Ohio and Michigan.
BeijingWest is a joint venture among the investment arms of three large and powerful Chinese state enterprises: Shougang Corp., Bao'an Investment Development Co. and Beijing Fangshan State-Owned Asset Management Co.
In 2009, BeijingWest acquired the chassis division of Delphi Corp. for a reported $100 million. Its plant in Brighton, Mich., specializes in brakes and chassis components.
BeijingWest makes components for the Chevrolet Corvette, Cadillac CTS-V, Audi TT, Ferrari Italia, Land Rover Evoque and others.
That's right. Chinese state-owned enterprises, with tight links to China's central and municipal governments, are at the nexus of future product development in America and Europe.
Now, there's no need for conspiracy theories. China has made no effort to disguise these investments. And BeijingWest puts commerce so far ahead of politics that it even does business with Luxgen, a Taiwanese automaker.
Luxgen, which has been tight with Nissan for years, set up a new joint venture with Dongfeng Motor Corp. to produce cars in China. They named it Dongfeng-Yulon. And they're aiming to build 200,000 cars a year.
Imagine that: A Chinese government agency helping a Taiwanese car company to prepare vehicles for production and sale in China.
China considers Taiwan a renegade province, the Middle Kingdom's version of the prodigal son. Americans can take relief in knowing that most Chinese businesses, even the state-owned ones, prefer making money to waving flags.
Still, there is a strategic element to companies such as BWI that is worth attention.
China is frustrated by its failure to secure technology from its 20-year-old joint ventures with global companies inside China. The "copy and paste" approaches taken by Geely, Chery, BYD and other Chinese automakers to vehicle design have produced superficially appealing cars, but the guts of those vehicles are still second-rate.
To achieve a world-class auto industry, China knows it must master the art of designing and engineering new vehicles from the chassis up. That's where companies such as BWI come in.
How long before BWI starts channeling its expertise, acquired in America's heartland, back home? Sooner than you think. Look for the next generation of Chinese cars to be miles ahead of today's offerings -- thanks to enterprising companies such as BeijingWest.
China remains determined to dominate global markets, from Paris to Papua to Peoria.
Michael Dunne is president of Dunne & Co. and author of American Wheels Chinese Roads: The Story of General Motors in China.
