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China’s automotive industry

Jocelyn Ford Jun 19, 2006


TESS VIGELAND: Today the top General Motors executive in China started a new job at that country’s second largest automaker. Shanghai Automotive hired Philip Murtaugh to launch the company’s first export to Europe. Jocelyn Ford has more from Beijing.

JOCELYN FORD: Shanghai Automotive has already bought parts of Britain’s defunct Rover group, and Rover engineers are helping design its new car for export.

But the company’s executives don’t have international experience, so Shanghai Automotive is buying it. Auto Analyst Michael Dunne says former GM executive Phillip Murtagh has much-needed experience in manufacturing global brands.

MICHAEL DUNNE: It’s a sign that ‘We’re not going to cut corners. We’re going to go after the very best by hiring American executives with a lot of experience.’

In China, General Motors and Shanghai Automotive have a joint venture as required by the Chinese government. But several years from now, Dunne expects them to become competitors in the United States.

DUNNE: No question that American automakers will feel the pressure at home when the Chinese enter, but so will everyone else.

Like Japanese and Korean automakers. China’s big advantage over them is that it has a huge market at home. So large domestic sales can help support its export drive.

In Beijing, I’m Jocelyn Ford for Marketplace.

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