Younger Managers in China Are Good News for Brands
Relatively few top executives of Chinese automakers showed up in Chengdu last week to attend an automotive forum organized by the China Council for Promotion of International Trade. But that was a good thing.
Most domestic automakers instead sent middle-level managers to speak at the event. These people are in their 30s or early 40s, and they represent a new generation that is open and pragmatic. By contrast, their bosses generally are more than 50 years old. These senior executives carefully toe the line of China's policies because their state-owned companies have close ties to the government. That's why their public speeches often are tedious.
Old-school Chinese executives also tend to be media-shy and evasive with the press. But the younger generation is more candid. They dare to speak up their mind and care less about political correctness.
Here's an example: The government favors development of pure electric vehicles and plug-in hybrids instead of conventional hybrids. But at the Chengdu forum, Zhu Huarong, a vice president of Changan Automobile Co., dismissed China's EV policy as "merely public relations."
"You will find there are still a lot of problems with these vehicles when you develop them with taxpayers' money," Mr. Zhu warned.
A second example: Foreign automakers are required to form joint ventures with Chinese companies in order to share cutting-edge technology with their partners. Has the policy worked? We will never get a clear answer from senior Chinese executives.
But Xu Yulin, vice general manager of Guangzhou Automobile Group Co.'s passenger vehicle unit, says the policy has failed. Global automakers carefully shield their technology from their Chinese partners, Mr. Xu asserts. As proof, Mr. Xu noted his previous experience as sales manager of Guangqi Honda, a partnership between Honda Motor Co. and Guangzhou Auto. "At the joint venture we (Chinese managers) were denied access to the r&d work conducted," he said.
And here's a third example: After years of reckless expansion, the state-owned Chery Automobile Co. is struggling with declining sales and rising debt.
Asked what went wrong, company sales chief Zhen Zhaorui admitted that Chery paid too much attention to short-term sales. "We strived to rank first or second in sales among domestic brands," he said. "But we forgot to ask what our future direction should be."
Younger managers have another admirable trait -- they are more pragmatic than their elders. In the eyes of many Chinese people, domestic car brands are associated with national pride. But that can be a distraction, warned Yang Song, deputy sales chief of Dongfeng Nissan. Last year, his company -- a joint venture between Nissan Motor Co. and Dongfeng Motor Corp. -- created the domestic Venucia brand.
"Running a brand is basically running a business," said Mr. Yang, who oversees Venucia. "I only need to do well in my business and don't want to complicate it."
Over the past two years, Chinese car brands have steadily lost market share to their international rivals. As this new generation of young, pragmatic managers rise to senior positions, perhaps they will turn their companies around.
--Automotive News China--