Chinese Automaker to Develop Car for Global Market

By: Anthony Fontanelle

Automakers have been eyeing the Chinese auto market for years. The said market is steadily growing and this has captured the attention of global automakers. Different automobile manufacturers are currently expanding their presence in the Chinese auto scene.

The biggest American automaker has already partnered with a Chinese automaker in its quest for supremacy in the said market. Meanwhile, Europe's largest automaker Volkswagen is also fostering a working relationship with SACI, the biggest Chinese automaker. In a matter of years, the Chinese auto industry has seen partnership with large global automakers.

These partnerships will be moving in a new direction as Chinese automakers with their partners are now looking to develop vehicles which will not be sold only in China but also to other markets around the world.

Reuters reported that Volkswagen's Chinese arm, the Shanghai Volkswagen, is looking to develop a new sedan for the global market. According to Reuters, the said sedan will be a follow-up to the Passat Lingyu, a rebadged Passat built for the Chinese auto market.

This move by Shanghai Volkswagen shows that China is not only a growing market in the eyes of automakers but a potential production hub. Although Volkswagen produces auto parts in the country like the which are then exported to other countries, the venture is yet to produce a whole car meant for the global auto market.

This is also a positive for Chinese automakers. In the past, these automakers are content only on designing vehicles for the domestic market. Competition from established auto brands kept them from venturing in the global market. This situation has been amended with their partnerships with large and established automakers known worldwide.

The step benefits both Chinese and non-Chinese automakers. For automakers like Volkswagen, they will have a production hub where wages and parts are cheaper than in Europe or in the United States. This means a bigger profit on the end product. For Chinese automakers, the prominence of their partners can give them the break they need to enter the global auto market.

Tapping Chinese auto designers is also an advantage for European and American automakers. Since Chinese automakers design vehicles for domestic market, they have local knowledge. This means that Chinese auto designers know how to design vehicles which will be suited to the needs of other Asian markets. With several Asian countries steadily making progress in their economy, the market in Asian countries is also steadily growing.

Shanghai Volkswagen though is not the only Chinese auto maker which is eyeing the global market. Reuters reported that earlier this month, Chery Automobile made a deal with the Chrysler Group. The deal is to design and manufacture compact cars in China which will be sold in North America and other markets. It is expected that Chery will be the first Chinese automaker to enter the United States auto market.

The common denominator between Chery and Shanghai Volkswagen is that both are looking to develop small cars for the global market. The reason, of course, is the increasing price of gasoline which also heightened the demand for small but fuel efficient vehicles. With Volkswagen behind Shanghai Volkswagen and Chrysler behind Chery, it can be expected that China-made vehicles will be making their appearance on American showrooms in the near future.

It is not clear yet though whether these vehicles will be marketed with their Chinese badges or not. The answer to that, we will find out soon enough as more information from these automakers are made available.

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