China still a huge opportunity - International Trends - automobile industry forecast in China - Brief Article

Automotive Industries, Jan, 2002 by Andrea Wielgat

China has a population of about 1.3 billion people. Last year there were only around 650,000 cars sold in the country.

That's a huge potential for automakers looking to increase global sales. And that potential will be even greater now that China has entered the World Trade Organization.

But while it is not easy, automakers and suppliers can be successful in the country, says Shah Firoozi, president and chief executive of Project Advisors International Inc. (PAC), an international project management, engineering services and quality systems company.

Firoozi has spent the past seven years helping General Motors Corp. set up Shanghai General Motors (SGM) and launch several vehicles, including the successful Sail small car.

Firoozi, who lives in China with his family for a majority of the year, says companies must make a long-term commitment to the region to get the customer loyalty needed to survive in the market "The region is extremely brand-name orientated," Firoozi says. 'Much more than western regions."

Part of that long-term commitment, and one of the most important things a company can do, is to locate a top executive in China to run the business locally.

"The know-how (needed) cannot be gained by two-day trips," Firoozi says.

But PAC, like a growing list of automakers and suppliers, is dedicated to the market.

Companies should also look to locals for other management positions. Firoozi acknowledges that PAC did not do this and is now hurting for it.

"I would find it very difficult," says Firoozi, "for an international company to survive without a strong presence in the region."