China: “Share Your Tech, Volt, If You Want Our Markets”

Chevrolet Volt

The Chinese government has posed a most novel problem for General Motors. It is basically telling GM, “If you want access to our enormous car market to sell your Volt (as planned for the end of this year), you’ll have to share some of the car’s core technology.”

The story broke in the New York Times and promises to grow into one big brouhaha unless cooler heads prevail. Of course, cooler heads are scarcer than hen’s teeth these days—or a good cliché.

Here’s the nub of the problem:

The Chinese government is refusing to let the Volt qualify for subsidies totaling up to $19,300 a car unless G.M. agrees to transfer the engineering secrets for one of the Volt’s three main technologies to a joint venture in China with a Chinese automaker, G.M. officials said. Some international trade experts said China would risk violating World Trade Organization rules if it imposed that requirement.

China has pushed hard for the development of clean cars, giving large subsidies not only to buyers but to carmakers and developers, like BYD. But they need advanced technology to go to the next level. From the government’s point of view, why shouldn’t GM trade off something for the millions, nay, billions it will make in the world’s largest and hottest green-car market?

As Keith Bradsher, the NYT author, pointed out, that $19,300 is almost half of the Volt’s U.S. price. Now, those subsidies are only for cars made by Chinese automakers, “giving them a huge competitive advantage.”

The Volt, produced in Detroit, would be the pioneer—if the issue can be settled—and there is also the matter that China’s “discrimination” against the Volt, if that’s the word, would put them in violation of World Trade Organization rules. So now American and EU officials are getting into the act.

Other companies, like Ford, appear to be giving in to the Chinese demand. Ford is willing to transfer some core technology to a joint venture in China when it moves ahead with a vehicle to sell there.

Toyota plant in China

Toyota plant in China

Toyota, as reported on Automotive News and in the Wall Street Journal, is unlikely to shift production of next-gen hybrid parts to China, wanting to keep that stuff proprietary and out of Chinese hands. The company may, however, shift production of some present hybrids to China and build those cars in joint-venture operations.

Hyundai is reported to be developing a new EV brand just for China in a joint venture with Beijing Automotive, producing cars by 2012. So, it looks like auto companies are beginning to accept the government’s joint-venture policy. So is Nissan.

The reason is simple: By one prediction, there will be 500,000 EVs and hybrids on the roads in China by 2015. That number will double by 2020.

GM is still pushing China to let the Volt in without producing it there. Who will win that contest?

—jgoods

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3 Comments

  1. Well, Washington and Mr. Big, when you sell your souls to the devil, sooner or later he shows up to collect.
    China’s motto is “if you want to sell it here, you have to make it here. ” In America call that free trade.
    America’s motto is “if you want to sell it here, make it somewhere else so we can make more profit.” In America they call that free trade too.
    Do Americans have a choice? Vote for Mr. Liberal Clinton and you get NAFTA and that sucking sound. Vote for Mr. Bush and you get much more of the same and the government subsidies to big business to move production offshore. Ditto for Mr. Obama who has continued the “free trade” policies of his predecessors along with spending the treasury dry on endless wars and multi-billion dollar warplanes to shoot down imaginary enemies, none of whom can put anything newer than 1970’s technology in the air.
    What Americans need to do is take note of what is going on in many of the middle eastern countries and consider that they no longer can control their government through the democratic process.
    A government actually willing to fulfill it’s primary purpose– to protect the lives and property of it’s citizens— could bring China to it’s knees in a few short weeks:
    1. Nationalize all debts with China. That’s takes the club out of their hands.
    2. Embargo all trade with China. That brings their economy down within a few weeks.
    3. Only allow trade to resume with China on a quid-pro-quo basis, so China has to accept the same level of imports from us that we get from them. In other words, tell them that if they want to sell it here, they have to make it here.
    I’ll be watching for pigs to fly and hell to freeze over, which is what will happen before an American politician raises a finger in defense of his own country. What the heck was that definition of treason?
    And while they’re at it: Start controlling energy production and exploitation of this country by prohibiting the buying and selling of energy as commodoties. Eliminating speculation on energy will go a long way to stabilize prices and stop the looting of the public.

  2. Ha! Sadly, China will. US and now foreign corporations and/or corporate entities will sell their souls to gain access to China’s markets. Hell, if they don’t, these guys will STEAL it from us anyway. These guys are great copy catters and they are smart to boot. Guess where this is going?? Our politicians think they’re smart when they screw their countrymen. These guys are much smarter. They screw us and their people as well.

    I have long whined about NAFTA and other foreign agreements as being job exporting mechanisms and I think I have been proven correct. I also opposed Chinese entry into the WTO and we’re seeing the same thing going on with this issue. When will we ever learn?? Now we have treaties waiting to be signed with Korea, Columbia, etc that will do the same as NAFTA. And we whine about joblessness here?? The politicians and corporate chieftans here talk about being good citizens and they all work to evade taxes by using foreign banks to keep their money hidden there and still demand that their taxes be cut even further, all the while bragging that they create jobs……….IN CHINA!! What fools the American people and short term thinking CEOs are. How is this benefiting America and Americans??? I seriously believe that this is as close to treason as you can get. Shame!! Throw them the finger, GM.

    Disclaimer: Since I’m on a political rant allow me to further throw the finger to Americans who vote these damned politicians into office not realizing that those same politicians espouse policies that work to the detriment of those who voted them into office. If you don’t get that, I mean quit voting for people who end up creating policies that screw you. When will people get that?
    Again my sincerest apologies for going off like this, but I hate traitors, American or foreign. Amen! Live long, and prosper!

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