TEXT OF INTERVIEW
Bill Radke: Automakers don't have a whole lot to be excited about these days, but there's always the Shanghai Auto Show. It just ended today, after several sold out, excited days in what is now the world's largest car market. Our China bureau chief Scott Tong has been there, checking out the Chinese carmakers. Scott, what did you see?
Scott Tong: Well Bill, I looked at the Chinese brands and I saw a lot of knock-offs. I mean if imitation is flattery then Toyota has a lot to be proud of at the Shanghai Auto Show. Because there's a Chinese brand dead-ringer for it's Rav4 SUV. There's a lot of clones here -- a pretty good clone of the Rolls Royce, the Mercedes sports car, even the Mini Cooper. In fact, that Mini Cooper copy from the Chinese brand Lifan sat on the exhibit floor next to a big sign that said "innovation." We're going to upload some of these photos to our Web site, but the serious point is, you know, China does a lot of things well, including low price. But in many sectors, it still lags in things like creativity and design. And Bill, it's pretty obvious at the Shanghai Auto Show.
Radke: Are Chinese automakers happy to clone, or are they trying to make up that innovation gap?
Tong: Oh, they all know that they have to make up the gap, and they all know it's not going to come easy. One way to get ideas, by buying them -- that is for a Chinese brand to buy a foreign brand, and a lot of them are on the sales block right now. I talked to Dan Rosen at the Institute for International Economics, and he thinks it's just a matter of time before this happens:
Dan Rosen: If ever there were a time when the pricing was attractive to a Chinese firm, it's now. And while the majority of Chinese firms probably don't have the stomach for this fight yet, somebody's going to be the one to go first. And I think we'll probably see that before the year is over would be my guess.
So that's a bold prediction, Bill, from Dan Rosen. Another way for Chinese automakers to get ideas is to squeeze them out of the foreign car makers. I mean, if General Motors or Toyota want to come and sell their cars in China, they have to partner with a Chinese automaker and share their ideas. It's a little bit of a Venus fly trap, but lots of countries do this to try to bring in the innovation from the West.
Radke: So Scott, what's your report -- Chinese automakers taking over the car world?
Tong: For now in the auto business, I think the object in mirror is a little smaller than it appears right now. Most think that the Chinese-brand cars, for awhile, will be kind of so-so, they'll be good enough. But you know, good enough is perfectly fine in a lot of markets in the world. China's putting pieces in some very interesting places, and eventually they want to come to North America.
Radke: Scott Tong in Shanghai. Thank you.
Tong: OK, Bill, thanks.