SHANGHAI -- Nearly all Chinese parts suppliers are contract producers of low-tech parts. SAIC Motor Corp., General Motors' main partner in China, wants to be more.
The ambitious company aims to be a global supplier to major automakers, in the same league as companies such as Delphi Corp., Robert Bosch Corp. and Denso Corp.
On the surface, the company, which has deep roots in China's state-planned economy, has a shot.
It owns more than 60 supplier companies, most of which are joint ventures with companies such as Visteon Corp., ZF Friedrichshafen AG, TRW Automotive Inc. and Bosch. It has sales offices in Detroit, Tokyo and Hamburg, Germany.
Already, SAIC Motor suppliers provide prop shafts for GM cars in North America and suspension springs for cars at GM operations in Canada and the United States.
But SAIC Motor's owner, the Shanghai government, is unwilling to force those suppliers to face full market competition in China's protected auto industry.
And the company's drive to expand through foreign partnerships has left SAIC Motor with little of its own intellectual property.
SAIC Motor's predicament says much about China's entire auto industry. Yes, Chinese companies can make cheap cars and components. But can they go beyond that to develop new engineering techniques and technologies essential for global growth?
So far, no.
"SAIC has some good people. But dig deep, and the foundation for an international company is not there," says an executive at a local supplier to SAIC Motor that is not part of the company.
Like all the executives interviewed for this story, he wouldn't risk SAIC Motor's wrath by allowing his name to be used.