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In the central city of Wuhan, Honda has just finished quadrupling the capacity of its joint-venture factory with the Dongfeng Motor Group, to 120,000 cars a year. It is also starting to build the Civic there. The expansion, costing $350 million, took just a year, half as long as a comparable expansion in the United States.
Perhaps most tellingly, on Dec. 15 Toyota began assembling Prius hybrids in the northern city of Changchun. The world's multinationals had long been leery of transferring proprietary technology to make hybrid gasoline-electric engines in China, for fear that it would be copied. While Toyota is still cautious, China is nonetheless the only place besides Japan where Toyota is assembling the Prius, arguably its most important car in a decade.
Furthermore, Volkswagen said in September that it would jointly develop a hybrid minivan for the Chinese market with Shanghai Automotive — a project that is likely to give the Chinese automaker a significant understanding of the technology.
THE risk for the multinationals is that their inventions may be turned against them. When G.M. followed Volkswagen into the Chinese market in the mid-1990's, it was assigned the same partner: Shanghai Automotive, which announced plans on Feb. 23 to begin assembling and selling its own brand of cars in China while retaining the joint ventures. Other Chinese partners of multinationals are expected to follow suit in the next several years.
G.M., Ford, Volkswagen and other multinationals continue to work with Chinese partners because the government here requires them to do so. Foreign companies must assemble cars in 50-50 joint ventures with local partners. Honda alone has a 60 percent stake in a factory: a plant in Guangzhou that makes cars only for export.
Chinese automakers are also buying modern technology and design themselves. Chery has hired some of the best-known Italian auto design firms to spruce up its cars. When the MG Rover Group of Britain entered bankruptcy proceedings last year, the Nanjing Automobile Group outbid Shanghai Automotive to take control of Rover and its fairly modern engine-producing subsidiary, Powertrain Ltd., and move it to China.
The Lifan Group, a car and motorcycle maker with headquarters several miles from the Ford plant here, is bidding to buy one of the world's most advanced engine factories, a joint venture of DaimlerChrysler and BMW in southern Brazil.
But running efficient factories can often be even more important than buying the latest, most expensive robots. The Hafei Group, an automaker in Harbin in northern China, discovered this when it installed expensive European and Japanese automated equipment four years ago, only to find that its disorderly factory layout was less efficient and less flexible than its aging factory next door, where workers used hammers and other hand tools in smoky air.
Inventory control is another matter. Many Chinese auto factories keep extensive, costly stockpiles of parts on hand, whereas new Western-designed factories, including the engine operation in southern Brazil, are designed to receive frequent but small shipments from suppliers. Chinese manufacturers are now learning from their Western partners how to operate with this just-in-time delivery of parts.
The best way to appreciate how car manufacturing in China has changed is to look at the Ford factory here, a 50-50 joint venture with the Chongqing Chang'an Automobile Company. The first production line was supposed to be simple, relying heavily on manual labor and producing a sturdy Fiesta sedan of older design. Teams of local managers and workers were sent to the Philippines and India to learn the craft.
But the second line now includes robots to weld the stiff bodies of the Focus sedans for a more precise ride. Another robot applies the adhesive that holds the windshield in place, as in Germany. One small difference is that a robot guides the windshield into place in Germany, while people do so here, said Mr. Li, whom Ford sent to Germany for four weeks to study the system there.
Wang Cheng-guo, a strapping 23-year-old with a two-year degree in computer hardware from a technical college, started working at the Ford factory in 2004. Each day, he had to strain to lift 50-pound seats by hand into sedans on the first production line here.
Mr. Wang said that with five eight-hour days a week and pay that has now reached nearly $200 a month, the job nonetheless looked good to him when compared with his father's job at a nearby Chang'an car factory. His father, 48, has worked from 7 a.m. until 11 p.m. at that factory, with few vacations, for almost 30 years. While his father still pushes racks of parts to the assembly line, the son earns more, even with a much shorter schedule.
"When I was young, I rarely saw him," said Mr. Wang, who with his first Ford paycheck bought his mother a thick green winter coat and took his parents to a traditional spicy dinner of Chongqing hot pot.
Three months after Mr. Wang joined the factory, Ford improved the first production line by installing an electrical boom to help him swing the seats into the cars. When he concluded that the boom made a time-consuming pivot in the wrong direction and asked that it swing into the car from a different angle, local managers soon made the change — an adjustment that might have languished for months in more bureaucratic factories in other countries.
Mr. Wang, recently engaged, is now making all sorts of plans, the kind that millions of Chinese want to make as prices fall and technology improves. "I want to get married," he said, "and get a car someday." 1 2
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