China Seeking Auto Industry, Piece by Piece

With strong backing from the Communist Party, the Chinese company Lifan is making the jump from manufacturing motorcycles to cars, planning to compete with companies like Honda and Ford. The company is bidding to acquire one of the most innovative car engine plants in the industry from Damiler Chrysler and BMW The plant is in Brazil, but Lifan plans to break Campo Largo down and reassemble it in China. Built in 1999, Campo Largo blends the latest US and German technology to create engines capable of powering vehicles that are roomy and extremely fuel-efficient. The demand for such cars is high in China, and manufacturers are betting that, as oil prices continue to soar, they could break into western markets with such a product. So far, China’s inability to produce “sophisticated, reliable engines” has been the biggest challenge as its automakers modernize and set their sights on exporting to the US and Europe. The Chinese competitive advantage is spelled out by Lifan’s owner: “Americans work 5 days a week, we in China work 7 days. Americans work 8 hours a day, and we work 16 hours.” – YaleGlobal