SWITZERLAND: China is the new competitive reality according to Lutz
China is like "a freight train driving down on us," according to Robert Lutz, General Motors vice chairman and the firm's unofficial 'car czar'.
Lutz said the "young tiger" domestic China automakers such as Geely, Great Wall and Chery will soon start exporting to the west.
"They are the new competitive reality. We have not yet begun to see how they will affect international competition," Lutz told the Automotive News Europe Congress in Montreux.
Lutz said the Chinese auto industry is developing far faster than he anticipated.
The process towards auto mobility that took 20 years in Europe has happened in China in just two years, said Lutz.
"In 2000 the streets of Beijing and Shanghai were filled with bicycles. Now the bicycles have been replaced by Passats and Buicks."
Lutz warned that Europe is vulnerable to Chinese competition because it is becoming less competitive as an auto production base with its high labour costs and shorter working hours.
"The way the European economy is run is worrying. It is slow to adapt to the international environment and it lags behind to the US in capital investment.
Lutz said GM's recent reorganisation of its loss-making European arm to integrate more closely its Opel, Vauxhall and Saab operations will not be at the expense of those brands.
"Opel, Vauxhall and Saab will thrive far more together than they would as individual entities," said Lutz.
GM Europe lost $US504 million (about €417 million) last year, following losses of $1 billion in 2002 and $765 million in 2001.
Former Opel chairman Carl-Peter Forster was appointed as GM Europe president. He is charged with to reducing duplications in areas such as product development, engineering, design and marketing.