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"China more a threat than opportunity for auto industry."
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CHINA: "China Automotive Monthly - Executive Summary - February 2013" report

CHINA: "China Automotive Monthly - Executive Summary - February 2013" report. 12-page report by LMC Automotive.

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backCHINAtalk May, 2012

China Embarks on a New Push for Quality

As its economy slows, China looks to Six Sigma and other quality efforts to mitigate potential weaknesses.

“When you drink water, remember the spring.”

This Chinese proverb reminds us of the connection between the spring, the water and the drinker. The slightest variation in the source affects the quality of water that either quenches our thirst or sends us searching for another source. Similarly, the products made in China depend on the quality habits of the manufacturer, and ultimately impact a global customer base.

Chinese manufacturing is often considered synonymous with a large, focused workforce that produces goods with a premium on cost and convenience, perhaps at the expense of quality. However, the reality today is that China, like all industrialized nations, has a spectrum of quality that ranges from poor to superior. In the past, heightened demands for products allowed for quality discrepancies, but now a shift in consumer and production quality expectations creates new standards to reverberate through the manufacturing community.

As Growth Slows, Quality is not a Luxury

Over the past 30 years, China’s economy saw an unprecedented boom with an average growth rate at 9.9%. The manufacturing industry, in particular, took advantage of the unparalleled growth opportunities in the Chinese landscape. With fewer environmental, labor and regulatory hurdles than other nations, China’s production opportunities were abundant.

In a new economy, with less demand and increased competition, manufacturers can no longer rely on abundance to drive down costs. In 2010, China’s economy, the world’s second largest, grew at a rate of 10.4%; in 2011 the rate dropped to 9.2%. The Chinese leadership set the 2012 growth target at 7.5% and for the first time is acknowledging that the economy is slowing.

A recent report by the World Bank and a Chinese government think tank, titled China 2030, offers an even more stunning outlook. According to the report, China’s economy is in danger of a sharp slowdown as it transitions from a middle income society to a high income society.

China 2030 is an influential report among China’s upcoming generation of leaders. It details reform and provides a roadmap that challenges China to transition away from the policies that brought so much success in the past 30 years, and approach the new challenges of the future in a very different way.

To read entire article, please click here.

Source: IndustryWeek - GAI

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