Sweden’s unions are on a hot trail. They think that –ohmygod- the Chinese government could be pulling the strings with Geely and Volvo. China’s Geely won’t say where they get the money for buying Volvo from Ford. Geely says its backers include Chinese banks. Sweden’s union leaders are concerned that the Chinese government may ultimately be behind the takeover. Well duh, most (if not all) Chinese banks are owned by the Chinese government. Kindof. Somehow.
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On Wednesday, German German tire and car parts maker Continental AG joined the long line of multinationals who opened a R&D facility in China. The multinationals are way ahead of popular wisdom that technology is developed in the West and ripped off in the East. In reality, development has long left the building and has taken up shop in China.

Continental’s R&D center in northeast Shanghai will have 900 engineers working away by early next year. They will focus on the design and development of vehicle electronics. Shanghai Daily reports that Continental plans another technical center in the Jiading District if Shanghai which will do vehicle development and system testing. Not the stuff you do with a sledgehammer.
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China is the perfect place to think about the future shape of mobility. It’s my job here to push my staff to push the envelope and think about the global automotive future from Beijing

Mercedes designer Olivier Boulay, explains his inspiration migration from Japan’s chauffeur-car culture to the streets of Beijing. The Wall Street Journal puts the cliches about China’s role in the world of automotive design, pointing out that (among other things) for every Geely GE, there’s a Buick Invicta.  Not only are Chinese designers affecting Western brands, other Western brands like Mercedes are transferring design staff to China to seek out inspiration in the world’s new largest car market. And developing styling to Chinese tastes is about more than gaining market share there. China’s seemingly contradictory love affairs with conspicuous consumption and electric vehicles (mostly bicycles) represent a heady fusion of luxury and futuretech, a combination that already defines the marketing of many Western luxury car brands. As these trends develop, and as the Chinese market grows, auto design will increasingly be shaped by and in the Middle Kingdom.

China has barely received wireless 3G service (a little later than the US, much later than Europe and Japan.)  China has three competing  3G  technologies, one based on the globally accepted WDCMA (UMTS) standard, the other two homegrown. That, and the fact that coverage is still spotty, doesn’t stop them from networking their cars. Chinese love their mobile phones and they love their cars.  In Beijing, nearly one in every inhabitant has a mobile. China counts approximately 700m mobile phones, one for every two people.

Changan Auto has signed a strategic cooperation agreement this week with China Mobile to develop a smart vehicle based on 3G wireless technologies, Xinhua reports via Gasgoo.
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As U.S. President Barack Obama landed in Shanghai for a weeklong visit to his largest creditor, China, the news awaited him that China’s Ministry of Commerce will investigate the U.S. government’s financing and rescue plans for the American auto industry, Shanghai Daily reports.

The move is part of China’s probe into possible dumping and subsidies on U.S.-made vehicles imported to China, the ministry said. Trade officials will be looking for dumping practices and for unfair government subsidies.
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In January 2009, China surpassed the USA as the world’s largest car market. Since then, the gap had widened month after month. While China is clocking in near triple digit growth rates, US sales are still down. Even GM’s Henderson believes that China will stay ahead of the USA for quite some times. “It’s not a blip,” Henderson said to AFP. Now, eleven months later, the news transpired to the Freep.
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When we reported Chinese rumors that Veedub might open a factory in Southern China to make up for its lack of exposure and market share down south, we wondered “which of their two Chinese joint venture partners will get the new plant.” If the latest rumors are true, all options are wide open. It might even be a new joint venture partner. According to Guangzhou Daily (via Gasgoo) Volkswagen could bring its ill-fated SEAT brand to China.

We’ll know more when VW will announce its “South Strategy” at the 2009 Guangzhou auto show next week. If they do.
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A very strange spy scandal is brewing between (South) Korea and China. Acting on a tip of the (South) Korean National Intelligence Service (the Korean equivalent of  the CIA and FBI rolled into one,)  Korean state prosecutors accused China’s SAIC of stealing sensitive state secrets from Korea.

Then, they indicted seven senior Korean engineers at Korea’s Ssangyong on charges of leaking technology essential to develop hybrid cars.
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“China is a global driver of growth in the automotive market,” said Friedrich Eichiner, CFO of the BMW Group. “China will play a major role in the global automotive business, in the development of future technologies.” Then he signed off on a major expansion project. Together with joint venture partner Brilliance, BMW will be able to produce 175,000 Made in China BMWs, up from 30,000 units currently.
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China may be the world’s largest auto market until further notice. Its much feared auto exports however are nothing to write home about. In fact, China’s already measly car exports have declined for 14 consecutive months since August 2008. For the first half of this year, China exported only 191,000 units. This in a market that is expected to be good for 12m units domestically. Other countries, such as Germany and Japan, typically export the same number of cars they consume at home. A good deal of the few vehicles that are exported from China are commercial and utility vehicles, sold to underdeveloped markets.

Two months ago, Zhao Hang, President of the China Automotive Technology and Research Center, blamed quality and after-sale service problems for the underwhelming performance. He also said that Chinese auto exporters lack knowledge of overseas demand, government policies, regulations and certification.

The Chinese government can’t stand it any longer.
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The Chinese government had announced earlier this year that it wants to “encourage” its more than 100 automakers (nobody is quite sure how many there really are) to consolidate. The goal: Make China’s industry more competitive with foreign rivals. Beijing wants to see four big ones and four smaller ones. Unsaid: the remaining 90-odd carmakers should look for other employment.

To lead by example, the Chinese government just initiated one of the largest merger deals in the Chinese auto industry. Easy for them to do: The government owns both companies.
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At the upcoming 2009 Guangzhou auto show, Volkswagen China is expected to announce that they will build a plant in southern China, Gasgoo writes, citing reports in sohu.com. Not much else is revealed, not even which of their two Chinese joint venture partners will get the new plant.

Volkswagen cooperates with two companies in China: FAW, based in Changchun in the North, and SAIC, based in Shanghai in East China. Both are bitter rivals.
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Intellectual property warriors, get your guns: Following GM, its arch nemesis Toyota will plant a brand new R & D center smack into the alleged intellectual property jungle called China. Toyota plans to spend between $330 and $440 million for the center. Building will commence next year. Compared to Toyota, the one GM built in 2008 was the lite version at a price of only $250 million.

The Toyota R&D center, complete with a full-scale test course, will be located not far from the GM center, in the outskirts of Shanghai, Gasgoo reports.
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