Tag Archives: cars

The Car that Changed the World (part II)

A new car has been born. In the Shandong backwater province, halfway between Shanghai and Beijing, a revolution is unfolding.
This will change the world. Again.

Ten years after the unexpected success of Chery QQ, a new generation of cars is being created. Light weight, compact cars with 100% electric drive.
By radical re-thinking of how cars are used in cities, they have developed a concept for mobility based on medium speed (<80 km/h) and very low weight (<500kg). This makes it possible to use all the technology from the electric scooter revolution.
By re-using these mass-market components, reliability and low cost is achieved. A complete electric car is yours for less than 2500 euro.

(In 2002 petrol scooters were banned in the 10 largest cities, and a mass-market for electric scooters was created almost overnight. Today there are more than 100 million electric scooters on the streets in China, and the price has dropped to 90-200 euro, depending on model. More about this another time.)

The electric carlets are officially recognized in Shandong province, where the first wave is rolling out.
In other provinces they are popping up like mushrooms.
However, there is no nationwide launch planned yet. The legal boundaries are still murky whether it should be counted as a scooter or a car. As soon as this is clarified I predict that there will be another hundred million electric vehicles on the streets a few years from now.

Electric 2-seater (hyev.com)
Electric 2-seater (hyev.com)

(www.hyev.cn)

Most traditional car-makers in Europe and America are attached to all the ideas and concepts of what a car must be, with comfort and gadgets and a powerful engine. The modern car is developed for a suburban environment. Large loading capacity and higher speeds were necessary.
However, since this year, more than half of the planet’s population live in cities where speeds are low and space is limited. Therefore it is imperative to look for new solutions to the mobility problem, and an excellent proving ground is China, where hundreds of millions of people would like to have something better than a scooter.

Of course a 450kg thin-steel-and-plastic car will not survive a head-on collision with an SUV, so safety is a concern. However, an enclosed compartment is probably better than an open scooter. It all depends on what you compare with. And sooner-or-later we should probably separate traffic by weight.

Electric four-seater "SMRT".
Electric four-seater “SMRT”.

This year, city air quality and air pollution has come to the top of the political agenda due to the fact that the municipalities have started to publish the air quality measurements on-line. Everyone I know has an App on their smartphone that displays the air quality index. The school of my kids keep all children inside during recess when the levels are particularly bad.
I strongly believe that these light-weight mini-cars is part of the solution. If Beijing would ban petrol engines inside the ring-roads, the local air quality would certainly improve.

I dare the European Union to ban petrol scooters. I dare you to endorse these electric mini cars.
Europe should not miss this round of mobility revolution!

Family electric car from Haima.
Family electric car from Haima.
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The Car that Changed the World

Chery QQ - the car that changed the world
Chery QQ – the car that changed the world

I am convinced that Chery QQ is the most influential car from the last 10 years.
“Which car? Why did I never hear about this one?” I hear you thinking.
Still they have produced more than a million of these cars in the last few years.
This year, Chery was exporting more than 400,000 cars to Asia, East Europe, Africa and South America.

Some background first. Chery started out as a license-producer, making Seat cars in 1999, in the backwater town of Wuhu. Nobody noticed. At that time, there were ten car factories in China, most of them 50/50 joint ventures with Chinese government owned car plants with multinationals. Most successful ones were First-Auto-Works-VAG producing Audi in the north and SAIC-VAG “SVW” producing Volkswagens in Shanghai.
Ten years ago, in 2003, when the story begins, cars were quite expensive in China.
It was a very profitable, but small market, dominated by a handful players – all joint-ventures with foreign companies.

When nobody was looking, Chery launched a car on the market with a very low price under their own brand. It was a rip-off/copy/shanzhai of the Daewoo Matiz/Chevrolet Spark, but at an even lower price.
Here was a small four-seater at a price HALF of the second cheapest car on the market.

Within a year, car prices fell with 30% all across China in response to the very low price alternative of Chery QQ.
After two years, Chery was exporting hundreds of thousands of cars across Asia.

There has been much media attention in the last five years for the Tata Nano, the affordable micro-car that would raise the living standards of the masses.
However, it has been a commercial fiasco. Millions of dollars invested, and sales are less than 10,000/year.
In reality, the real affordable microcar, giving automotive power to more than a million families across the world is the Chery QQ, starting at 2,100 euro.

The second effect of Chery QQ is the snowball effect. They showed the world that anybody can build a car. If they can do it in Wuhu, Anhui, they surely can do it in Chongqing, Dalian, Shenyang and Wulumuqi, right?
There is a lot of prestige in car-factories.
Every governor of a province in China wanted to have his own car factory.
Therefore, starting in 2005, there have been car plants sprouting out of the ground all across China.
The new thing is that all these are fully owned Chinese companies, some private but most are partly owned by the province/municipality.
Today there are 38 Chinese brands of cars, most of which have not yet been signalled outside of China.
The innovation is bursting and new variants of small, medium and large cars appear every month.
There is an enormous overcapacity, which drives the prices to the bottom, so there will be consolidation in the coming years.

The coming ten years will be the Decade of the Chinese Car.