Jiang Shijie, a reporter for People's Daily newspaper, was praising the Qilin, a concept car unveiled at the Shanghai auto show last month and developed by a joint venture between General Motors and Shanghai Automotive Industry Corp.
Jiang told a beaming Rudolph Schlais Jr., president of General Motors Asian and Pacific Operations, that a recent article in the official People's Daily had listed key features that a car for the Chinese market should have, and the Qilin met all of them.
But could it be sold for less than $10,000?
It could, said Schlais. After all, engineers and designers from the joint venture, the Pan Asia Technical Automotive Center, had interviewed consumers in five mid-sized Chinese cities to find out what they wanted in a vehicle. Affordability was key.
So, will it be built? Sitting next to Schlais at the luncheon table, Lu Jian, past president of SAIC, GM's partner in PATAC and the $1.6 billion Buick assembly plant here, said no. 'There's no plan (for such a vehicle) in the next five years,' he said.
Instead, Shanghai GM will build a Chevrolet Venture-derived minivan beginning next year.
Choosing a large minivan over the small, utilitarian Qilin may seem an odd decision. After all, most analysts and industry executives agree that the Chinese market is shifting. Once dominated by government agencies and large companies, China's market today is increasingly led by individual buyers - the sort the Qilin researchers interviewed.
Indeed, the Qilin, pronounced 'SHE-lin' and named for a mythical Chinese beast, drew enormous crowds at the show.
Volkswagen AG, whose two China ventures combined held almost 60 percent of the Chinese passenger-car market in the first five months of 1999, expects the percentage of cars bought by private customers to rise 'from 30 percent today to over 50 percent in the coming years,' said Stefan Jacoby, VW vice president for the Asia-Pacific region.
Indeed, VW also plans an affordable compact car for China. But not yet.
Won't start from scratch
VW, Shanghai GM and others may give lip service to providing cars for China's masses. But as was seen at the Auto Shanghai '99 motor show, their business strategy takes a different tack. All of the major foreign makers in China seek brand extensions that will build on their existing investments in China.
In essence, they want a better return on their investments by gradually building on what they already have, rather than starting something as new as a people's car for China, at least for now.
Consider Shanghai GM.
Its as-yet-unnamed minivan, which was unveiled at the Shanghai show, will use the same platform and drivetrain that go into the Buick sedan the plant currently builds. Adding the minivan will require no additional investment beyond the $1.6 billion already committed to the plant. The minivan will not raise capacity beyond the original 100,000 target, nor will it require a second shift at the plant.
VW's product blitz
At VW, the plan is first to meet the new competition in the key middle and upper segments. Shanghai Volkswagen builds the dated but perennially best-selling Santana and the fresher Santana 2000. Its FAW-Volkswagen venture in Changchun, northeast China, builds the Jetta, the Jetta King and the Audi 200.
Later this year, FAW-Volkswagen will begin building the Audi A6. Next year, Shanghai VW will add a Chinese version of the Passat. Tweaked for the Chinese market, it will be 10 centimeters longer to accommodate a larger rear seat area and will have more chrome and other touches to make it more appealing to Chinese tastes.
In 2001, VW plans to add a derivative of the Bora mid-sized car - the European Jetta - to its China lineup.
To support the product blitz, VW is investing more in China and moving to integrate the operations of its two joint ventures as much as possible.
VW had invested 3.6 billion German marks, or about $2 billion at current exchange rates, in China by the end of 1998. By 2002, it will invest another $1.1 billion to launch the new models and finish a new research and development center it is building near its Shanghai complex.
Guangzhou Honda began building the Accord in a former Peugeot plant earlier this year. So far, it has sold 2,500 Accords through 17 dealers. The plant aims to build 30,000 at its first stage and raise output to 50,000 within five years. Honda aims to have 100 dealers in China by year end.
Although the Guangzhou plant is a new auto venture for Honda, it, too, marks an extension on prior investments.