Super Car Companies Explore to Asia

Super Car Companies Explore to Asia - Despite not actually having a car in production, the firm Faraday Future has headline-writers gushing about its “Tesla-killing supercar” – an all-electric car that looks like the Batmobile. There is no doubting that the FFZero1 concept car just unveiled at the Consumer Electronics Show in Las Vegas this week is eye-catching, but it’s one of a number of new and transformed car brands. For example, the Detroit Electric SP:01 or the recently announced Fisker Force 1 and London Taxi Company’s TX5. What these companies have in common is a part- or fully-electric powertrain, a willingness to experiment with new business models, and Chinese funding.

In a lecture given in 2010, Coventry University Professor Tom Donnelly predicted that the Chinese had the global auto market in their sights. The size of the Chinese domestic market and the challenges of meeting standards in competitive Western markets mean that it’s unlikely we will see forecourts spilling over with Chinese brands such as Geelys or Dongfengs any time soon. But as Chinese manufacturing moves up the value chain, China is using its financial clout to buy-up well-known brands and supply expertise.

The most obvious example of this trend is the purchase of Volvo by Geely: this sturdy Swedish brand brings first-rate expertise and supply-chain networks. The part-purchase of Peugeot by Dongfeng follows a similar logic. Just as important is that these purchases provide the scope to enable Chinese manufacturers to test global markets and gain credibility, not just in Europe and America, but in the all-important domestic market where foreign brands remain (for now) highly prized.

This is a classic example of a technological catch-up strategy, and there are plenty of examples of other multi-nationals in emerging markets playing the same game – India’s Tata Motors asute purchase of Jaguar Land Rover, for example.

But, as the FFZero1 demonstrates, there is also something else happening: a leap-frog strategy whereby Chinese firms seeks to exploit new emerging technologies to gain an edge on Western competitors in fields that are still wide open.