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The Chinese Automobile Manufacturers are Coming!

  Norman Taylor & Associates
  September 10, 2010

Chinese automobile manufacturers are coming and they want the American markets more than a Frenchman wants a thirty hour work week.

It is only a matter of when, not if. This after all is the Golden Mountain, or so it used to be called by people wanting to emigrate from Asia. When examining this in the context of lemon law, the real question is what will this mean the first time someone calls a California lemon law attorney and says his Geely MK2 (Geely is a Chinese automobile manufacturer) has been to the Pasadena dealership for its fourth engine problem?

Tom Clancy in his fine novel “The Bear and the Dragon” referred to the Chinese as Klingons. what he meant was that they don’t have the same view of the world as those in the west. They have been doing business for thosuands of years in the middle Kingdom and to them westerners are Barbarians. Perhaps there is some truth to this from either viewpoint.

In trying to understand how China will go about selling automobiles to the west over the next twenty years, it would be easy to make comparisons to Japan and Korea. This would be a serious mistake. After the Second World War, Japanese manufactured goods had a reputation for shoddy materials and workmanship. In the fifties and sixties, Japan realized that in order to succeed at manufacturing they only had one avenue and that was to produce quality goods. They did exactly that, and companies like Toyota and Nissan soared in the American marketplace.

Twenty years later South Korea saw itself in the same position. Using Japan as an example, the Koreans followed with great success. In the eighties, J.D. Power’s Initial Quality Survey placed Korean car manufacturers, namely Hyundai and Kia, at the bottom. Today they are in the top quarter of the Initial Quality Survey. The only way to get there is to produce goods with superior quality.

It should be remembered that the Japanese were taught quality systems by W. Edwards Deming, an American statistician.

Will we see a similar quality improvement progression from the Chinese? So far what the world has seen does not bode well. In the article Dealing with China’s ‘Quality Fade’, Paul Midier writing for, tells of a story that points to a very different attitude toward the sale of goods to the west.

The following from Mr. Midier’s article is significant on many levels:

One of the problems facing China is that manufacturers continue to engage in a practice I call “quality fade.” This is the deliberate and secret habit of widening profit margins through a reduction in the quality of materials. Importers usually never notice what’s happening; downward changes are subtle but progressive. The initial production sample is fine, but with each successive production run, a bit more of the necessary inputs are missing.

Another more specific example of ‘Quality Fade’ was described by Mr. Midier:

Some quality issues are not all that serious, but others are downright frightening. One of the most disturbing examples I have encountered while working in China involved the manufacture and importation of aluminum systems used to construct high-rise commercial buildings. These are the systems that support tons of concrete as it is being poured, and their general stability is critical.

What does this mean to the American consumer? Fortunately there are strong consumer warranty laws at both the federal and state level. However, with the examples above in mind, when the Chinese cars arrive one would be advised to review the warranties very carefully indeed. American, European and Japanese manufactuers have shown time and again that they are not above trickery when trying to avoid the consequences of a lemon automobile.

Norman Taylor & Associates will be watching for the arrival of Chinese autombiles very carefully. They will read the fine print and be ready to help consumers when needed when it concerns the California Lemon Law.

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