Overseas Knowledge Keeps Chinese Car Brands Humming

"Sea Turtles" Are the Most Valuable Assets Chinese Automakers Have Acquired Overseas, Says Yang Jian

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SHANGHAI (AdAgeChina.com) -- While the auto industry in western countries is still struggling from the effects of the global downturn, Chinese companies are on a buying spree. Items on their shopping list include parts suppliers and famous international brands such as Volvo and Hummer.

Some commentators would say the best thing about the big slump has been to give China the opportunity to acquire prestigious foreign marques, along with the technology they owned.

Yang Jian
Yang Jian
In my opinion, the biggest benefit to China's auto industry has been something less tangible -- know-how.

Since western economies turned sour, hundreds of Chinese auto industry professionals have returned to their motherland. With them, they have brought knowledge and experience gained from many years of studying and working in the U.S. and Europe.

Many are now working for major state-owned automakers such as Beijing Automotive Industry Holding Corp. (BAIC) and Shanghai Automotive Industry Corp. (SAIC).

BAIC has hired more than 100 "sea turtles" -- a phrase used to describe Chinese citizens who have returned home after working or studying overseas. One of them is BAIC's general manager Wang Dazong. After graduating from Cornell University with a Ph.D. degree in 1985, he worked his way up to engineering manager and technical fellow at GM.

"Sea turtles"played a vital role in BAIC's acquisition of Saab's assets in early December. Half of the negotiating team previously worked for GM or Ford in the U.S. Thanks to their expertise and experience in dealing with international companies, it took BAIC only 18 days to close the deal.

Among state-owned automakers, SAIC has made the most substantive progress in developing its own brand-new energy vehicles. It plans to launch a hybrid Roewe 750 midsized car this year and a plug-in as well as an electric Roewe 550 compact car in 2012.

This too has had much to do with the many Chinese hired by SAIC who have lived in other countries, especially for its new energy vehicle division. More than 10 "sea turtles" now serve in key positions there. I personally know some of them -- they went to the U.S. in the 1980s to study engineering and were later employed by the Detroit Big 3.

Besides state-owned automakers, private auto companies have started hiring veteran auto professionals who were previously employed by international companies.

Take Geely as an example.

Former CEO of Fiat Powertrain Technologies China, Freeman H. Shen joined Geely in December as VP for the company's overseas business.

After gaining masters degrees in both engineering and business administration from U.S. universities, he worked for North American and European auto companies such as Eaton Corporation and BorgWarner Inc for many years before joined FPT.

Mr. Shen is the second "sea turtle" to take a high-level position at Geely. Frank Zhao, a former research executive for technical affairs at DaimlerChrysler, joined Geely in 2006 as VP for research and development.

In 2009, China overtook the U.S. to become the largest auto market in the world. But domestic Chinese automakers still have a lot of catching up to do in technology and brand building.

Acquiring western platforms, engine technologies and even brands might help Chinese automakers develop their own car brands, and quicken their efforts to crack mature markets.

But in the final analysis, as with many other industries, the biggest asset of any carmaker is its talent.

Returned veteran auto professionals have a wealth of cross-cultural experience and accumulated expertise. These, far more than technology or brands, will enable China's homegrown automakers to build internationally competitive products.

Yang Jian is the managing editor of Automotive News China, a publication of Crain Communications.

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