Designed in China. Driven 'Round the World

For years, automakers viewed China as a market where they could sell cars designed for other locales without much trouble. Now, sales on the mainland have become such a dominant part of worldwide car demand that Chinese consumer preferences are influencing global auto design. General Motors will offer the extra-roomy Chevrolet Sail sedan in India this year. It conceived the car with extended Chinese families in mind at its Shanghai design group in 2009. The Sail is already available in China, Chile, Ecuador, and Algeria. BMW and Daimler’s Mercedes-Benz began exporting stretch versions of their made-in-China luxury sedans to the Mideast and South America last month. “In the future, what is made for the Chinese will also be made for the world,” says Burt Wong, chief production designer at the Pan Asia Technical Automotive Center in Shanghai, the research and development joint venture between GM and China partner SAIC Motor.

The Chinese market’s sheer size explains why GM and other car companies are bolstering their design capabilities there. Global automakers sold a combined 18.5 million new four-wheeled vehicles in China last year, compared with 12.8 million light-duty vehicles (passenger cars and sport-utility vehicles) in the U.S., according to the Chinese auto association and researcher Autodata. Market tracker LMC Automotive projects that China’s share of the global market for light vehicles will hit 29 percent by 2016, up from 24 percent last year. That’s likely to keep growing, since China’s car ownership, at 60 vehicles per 1,000 people, is still less than half the world average, according to the China Association of Automobile Manufacturers. “Anyone with a clear mind would say China is the next place we should develop our next vehicles for,” says Michael Dunne, president of auto industry research firm Dunne & Co. “It’s inevitable. China is the biggest market in the world, it’s profitable and growing.” Another incentive to design cars in China and then ship abroad is to ease production overcapacity on the mainland, which will likely worsen through 2015, according to Mizuho Securities Asia. China exported 814,300 vehicles last year, up 49 percent from 2010, according to the country’s automakers’ association.