Pundits keep repeating that the biggest obstacle to Chinese companies buying Western brands is the culture gap. Adept at building monstrous bridges, the Chinese are tackling the culture thing. They even switched from Chinglish to Americanisms. Asked by reporters whether BAIC would consider approaching Saab alone, BAIC CEO Wang Dazong said: “I would just say, ‘stay tuned a little bit’.”
And who says Americans just plan for the next quarter, while Chinese plan for eternities? Wang Dazong sounds like GM is inhabited by slowpokes. Or by folks who had too much weed:
“I cannot control GM’s timetable. I obviously have no way of influencing GM’s timetable. I would just say we are very dynamic and impatient people. We want to do things fast.”
With BAIC making positive noises about Saab, and Geely moving forward about Volvo, the culture gap may be bridged after all. Or it may just be a bad trip.
I have an honorable compromise. Just walk way…Just walk away, and there will be an end to the horror.
I would imagine ‘the culture gap’ has nothing to do with it. Do Chinese companies plan for long term profitability like the Japenese or more short term like American companies? I think that would dictate what brands/companies/ideas they pursue.
Chinese companies plan for even shorter term profitability than American companies do. They don’t expect repeat customers, so they cheapen the product as much as possible to make the most on the first (and only) sale.
Geotpf-
That was definitely the case with the Chinese drywall manufacturers.
Do Chinese companies plan for long term profitability like the Japenese or more short term like American companies?
Since TTAC actually has someone in China can actually speak with some authority on the subject, I hesitate to to speculate (but not for very long, of course).
My uninformed impression is that the Chinese are generally gamblers looking for a quick advantage. A ‘grab-the-money-and-run’ attitude would go a long way IMHO towards explaining some of the behavior we’ve seen in the last 10 years from Chinese companies: patent infringement and blatant copying (ask Honda or GM/Daewoo ), faking products for profit without regard to danger to the consumer (see the protein-faking kidney-damaging milk additives scandal, or the dangerous dog-food for that matter.
Buying SAAB would be a gambler’s grab – hoping that you can turn the dealership network and parts supply chain into something before the money runs out. It would very similar to the Saturn gamble that Roger Penske finally decided not to take on. Keep the dealerships open and something will sell. They’re probably pitching the idea of selling all sorts of Chinese-built cars through the SAAB dealership chain. “Why take on the expense of building your own dealer network when you could be selling your (Chery’s/BYD electric cars et al) through our Chinese owned dealership chain?”
The problem with that theory is that Saab’s dealer network in America is pathetic. It’s not worth bothering. Saturn’s, at least, was (almost) worth a gamble, and Penske would have had he been able to source some product, any product.
“And who says Americans just plan for the next quarter, while Chinese plan for eternities? Wang Dazong sounds like GM is inhabited by slowpokes. ”
The Chinese government and state-owned businesses plan for the long term, while privately-owned companies generally plan for the short term.
For the private businesses, public companies with well-known brands (which are still few) have cycles similar to western counterparts, while OEM factories (which are the majority) only plan for the next batch of orders.
OEM manufacturers generally strive to eventually become brand names, because the margins for brand-named products are much, much higher, but developing quality and reputation takes time. One shortcut is to buy established brands, but it’s challenging as there are usually large cultural-gaps. Most Chinese name brands started off as OEM manufacturers, the ones that make crap generally get filtered out very quickly, while those who can learn to improve quality stay in the game.