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Fri, Apr 27, 2007 - Page 10 News List

US automakers, Michigan woo Chinese


Of all Detroit's sales pitches to China at this week's Shanghai auto show, Chrysler's was by far the most dramatic.

"The Jeep Commander is such an important product for us we wanted to come up with an exciting new way to bring it to market," Eric Ridenour, Chrysler's chief operating officer, declared as a video showed the vehicle being airdropped onto a grassy field. "So, we let it fly."

Chrysler's China chief, Simon Elliott followed the airborne Commander by parachute, on the screen, and then walked onstage brushing dust off his orange parachute suit as if he had just arrived from the sky.

Detroit's determination to woo China -- the auto market of the future -- is abundantly evident in Shanghai, where parts makers and Michigan state officials have turned out in force hoping both to boost sales and to win investment from the Chinese.

It's one way of coming to grips with the plant closures and other growing pains of globalization wracking Detroit's "Big Three" -- General Motors Corp, Ford Motor Co and DaimlerChrysler AG.

Those working in the industry are unanimous in their belief that the future of the auto industry lies in the East, in emerging markets like China where sales are soaring and both foreign and local automakers are pouring billions of dollars into expanding capacity.

After years of wooing Japanese and South Korean automakers, with mixed results, Michigan is going after Chinese business -- with a vengeance.

A trade mission organized by the Center for Automotive Research brought in parts, machinery, testing and equipment makers, promising meetings and counseling with US Commerce Department auto specialists and other experts.

A "US Pavilion" occupies a big chunk of one of the two main halls devoted to auto parts and components at the auto show, vying for attention with an even bigger German pavilion.

"We need to be in China. This is the only growing market in the world," said Luca Biagini, chief executive officer for Italian automotive systems designer and maker Magneti Marelli (China).

But the mission wasn't limited just to promoting exports to China's burgeoning market. A two-story Michigan display touted the state's attractions as North America's automotive capital as well as other industries such as high-tech.

So far, of the more than 3,600 foreign-invested operations in the Detroit area, only a handful are Chinese.

Chinese autos and auto-parts companies have made only limited investments abroad, and primarily in the developing countries that are the main markets for their low-cost buses, trucks and small passenger cars.

Any investments in the near future are unlikely to match such big projects as Toyota Motor Corp's US$150 million technical center under construction near Ann Arbor, Michigan.

A more typical potential investor would be Yu Shiming, chairman of Shanghai Jianlian Rubber Product Plant, a factory making oil seals, shock absorbers and other components.

Shanghai Jianlian is a supplier for several automakers including Shanghai GM, General Motors Corp's joint venture with Shanghai Automotive Industry Corp. But it also exports parts to the US and Europe.

Yu hasn't made any commitments year.

"We're investigating the situation," he said.

But China's automakers are beginning to shop overseas for the technology and expertise they need to build up globally competitive Chinese automakers. They are buying design studios and looking ahead to the day when they may need distribution and service networks to sell in coveted top-tier markets like the US.

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