Blog: Dave LeggettChina and Russia

Dave Leggett | 20 November 2007

We've published an interesting comment piece today from Clive Matthew-Wilson that considers the automotive scene in China and how Western firms are getting their fingers a bit burnt. One thing I think he is absolutely spot-on about is Chinese and Russian attitudes to Western capital. They will let it in, but only on their terms. For the Western multinationals in China there's a trade: 'play ball and make some hay while we allow you to, or you're not coming in'. And your shareholders won't be happy that your competitors are ahead of you in the BRICs will they?

Mr M-W paints a fairly stark picture. I suppose it could be tempered a little by the idea that in China some consumers will prefer Western brands over domestic ones (like they do in Russia) and there may yet be room for everyone, including Western brands continuing to make cars in China with their JVs. And if the Chinese partners are still 'learning' they may not want to enforce their Western partners' exit too soon. But that perhaps adds pressure to share even more (look at how VW is localising more design and engineering at SVW) - and we know where that eventually leads. 

Plenty of warning bells must be sounding about Russia, too. Different case study in terms of the state of the auto industry there, but Western interests are ultimately no less vulnerable. Ask BP.  

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