As the North American International Auto Show closes in Detroit, conventional wisdom has it that the five Chinese makers who displayed are years away from being a real threat: The cars and light trucks displayed are too crude in design and assembly, their technology is copied too badly from established makers, and there’s no proven ability to certify, service and warranty to western standards. The near incomprehensible press conferences and prevarications of the executives over timing and plans made it easy, all to easy, to hold this view. Proponents say, “Look how long it took the Japanese or the Koreans to become international players in the business.”

Years away does not mean never, though. The Chinese threat to established automakers is now greater than ever. In addition, it is accelerating. And Chinese brand exports are actually the last step of sophisticated central government plan for the automobile business. Saying they won’t be here this year or next, misses the point.

First, consider the protected Chinese market is now the world’s second largest since it passed Japan in 2006. Preliminary numbers for 2007 show it at almost 9 million units. Projections by the Chinese Association of Automobile Manufacturers have the Chinese market growing to 10 million units in 2008. The U.S. market will contract this year. It is just a question of how much. Chinese makers will continue to grow stronger in their home market, no matter what happens here.

China is also now clearly established as a global automotive force to be reckoned with. All major foreign automakers have been forced by the government to accept joint ventures with Chinese makers as the price of access to the booming market. Conventional “free trade’ wisdom at these carmakers has it that this is good for them because it expands their sales into the lucrative Chinese one and provides a source for inexpensive components they use in their home and other markets. And to be fair, western makers had no choice if they wanted to operate in China. Unlike the U.S., the government controls access to the Chinese market.

Vehicles and components are now being exported from these “foreign” makers in China and their joint venture partners. Some western automakers have sourcing goals of Chinese made components as high 30 percent no matter where their final assembly plants are located. All want their suppliers to match the “China price” where they build. The “foreign” makers in China supply technical expertise, the marketing magic of brand recognition and access to their excellent suppliers.

Rarely spoken of is the other side of this deal with the Chinese dragon that is emerging. Western makers including Toyota, General Motors, Volkswagen, Mercedes-Benz, and Honda are teaching the Chinese how to compete against themselves.

China America Cooperative Automotive said at the show that it would import small SUVs and pickups into the North American market by the end of this year. The vehicles will come from Hebei Zhongxing Automobile Company or ZXAuto. ZXAuto is currently exporting these in small volumes from China to 52 countries. While the timing may be suspect, Chamco’s intent is not.

Changfeng Motors showed a small SUV, CS6, its successor, the Liebro CS7 and Kylin, a 5-door hatchback that is on sale in Japan. Both are Mitsubishi based. When Changfeng displayed vehicles last year, they were engineering prototypes. This year all the vehicles on the display are in production and headed for export markets.

Geely showed its FC sedan currently in production in China. FC in size and equipment is a Corolla knock-off, and not as crude as you might think. Originally promised for 2008 here, it will appear in the U.S. sometime during an unspecified year. “It’s tough to say... but not anytime soon,” according to Mr. Li Shufu, chairman of Geely holdings. Geely is already producing its own engines and transmissions in China based on what it says are its own designs. The Chairman’s ambitions seem to be as vast as China. Stated goals by 2015 include a 2.5 percent share of the world market, production of 20 million cars annually, of which 65 percent are for export under the Geely brand.

As audacious in ambition were the claims by BYD Auto Company – for Build Your Dream – that its Camry-sized sedan, the F6DM, will be the world’s first Dual Mode plug-in hybrid when it goes on sale this summer in China for about $28,000. Unlike competing plug-in hybrid entries from Toyota and General Motors that appear to be at least two years away from production, the F6 hybrid does not use lithium Ion batteries, which are thought to be needed to accept the high charging and discharging rates that a plug-in requires. Instead, F6DM uses a new type of rechargeable battery that is based on iron with a stated 60-mile range. Skeptics are laughing, but the parent company is one of the largest producers of cell-phone batteries in the world. And, yes there are export plans but not for a few more years to meet U.S. standards, according to BYD.

This Chinese global export machine now emerging is due to the policies of the Chinese central government that were developed after careful study of the rise of the Japanese automotive industry, and the Koreans. The motivation of the government is simple. In order to survive in power it has to do something about the grinding poverty of 700 million of its 1.3 billion subjects. Economic growth is key. And it has been averaging a staggering 7 percent or better increase in gross domestic product for more than a decade by carefully managing access to the economy.

One of the key industries targeted by the government is automotive with a serious of goals: Meet growing Chinese domestic demand with local production – not imports. Use joint ventures to supply the local market and to make domestic Chinese makers competitive with the best in the world. Consolidate the fragmented local industry so that strong companies survive. Then promote the development of independent Chinese makers with their own technology and expertise and brands. Finally, export globally on massive scales.

It took the Japanese roughly 40 to 50 years to become global players, and the Koreans roughly 25. Both countries did it by restricting access to the home market while building the capabilities of local companies. The Chinese look on track to do it in about 15 or so. When they do start exporting, it will be the last step of a long-term plan. -- Ken Zino

There’ll be no hanky-panky in the back of your kid’s Smart car, that’s because there is no rear seat in the pint-sized 2-seater, noted Dave Schembri, president of SmartCar USA, the Penske-owned distributor of the French-made microcoupes.

“After all, what better car to have for your teenager than one without a backseat,” proclaimed Schembri, during a speech to the Automotive New World Congress.

But before you get the wrong idea, Schembri wasn’t talking about what happens when kids go parking on some quiet Lover’s Lane. The SmartCar executive was referring to the problem of kids getting distracted, a major cause of accidents among young drivers – by those sitting in the back seat.

The first Smart fortwo, which is produced by a subsidiary of Daimler AG, just went on sale at the beginning of January. Primarily geared for urban driving, the U.S. distributor reports logging more than 30,000 initial orders.

Smart Ramping Up Fast. Sales start after the first of the year. by Paul A. Eisenstein (11/19/2007)

2008 smart fortwo: First Drive. We test the Euro smart on U.S. roads. by Paul A. Eisenstein (7/11/2007)

Think of them as the automotive equivalent of Rodney Dangerfield. Tires just don’t get no respect. But they certainly deserve it. For all the improvements in automotive safety, performance and mileage, over the last few decades, few technical developments have made more of an impact than what’s been done to those four rubber doughnuts. And new tire rules should yield even more improvements to safety and mileage.

Following the fiasco which led to an estimated 280 deaths linked to the failure of Firestone tires on Ford Explorer SUVs, lawmakers ordered the use of tire pressure monitoring systems (TPMS) to alert motorists when one of their tires might be lowing air. Last week, an industry lawsuit challenging that rule was tossed out.

The good news is that some of the newer monitoring systems have overcome problems with earlier TPMS technology, which often flashed false alerts, and even when working right didn’t advise drivers which tire was running low.

Rulemakers are going several steps further. Last week, they approved a national registry, which will allow motorists to register tire purchases. If there’s a recall, like Firestone faced, notification would go out far more quickly.

Separately, Congress had its eyes on tire technology when it passed the updated, 35 mpg fuel economy law. The National Highway Traffic Safety Administration has been ordered to come up with a new mileage rating system for tires – similar to a system already in place that rates tires according to their maximum speed. You’ll be able to check those ratings whenever you go to buy new tires.

The NHTSA also has been ordered to come up with a national educational campaign to alert drivers to the need to keep tires properly inflated. Improper inflation was one possible reason for the Firestone/Ford tire disaster. Under-inflation, in particular, can reduce fuel economy and lead to premature tire wear and even catastrophic failure.

Tire rules to improve safety. Detroit News (1/28/08)

The dark art of promoting cars on European TV is stepping up another notch in terms of creativity. Gone are the days when you could just show a new model speeding through a vista of cornfields, though Peugeot once did it with the cornfields on fire as a variation on a theme.

Bakers building a Skoda entirely out of cake were a recent tasty treat for ad-watchers, while Citroen’s most memorable involves a car turning Transformer-like into an ice-dancing robot. The next smart promo comes from Ford, and sees an orchestra playing instruments created entirely from car components.

Airing from February, this harmonious masterpiece is the work of two Americans, Hollywood film composer Craig Richey and New York sound designer Bill Milbrodt.

The team took apart a Ford Focus five-door hatchback that had just come off the production line. “When we got it to the shop, it had less than a mile on the clock. We took the doors and fenders off, but we had the body shell intact and we later cut out of that the parts we wanted,” he said.

By the time the orchestra had been assembled for the photo shoot at Universal Studios in California, the team had constructed 31 instruments. Each has a name that instantly identified its origins. So pin back your ears and listen out for the Transmission Case Cello-Dulcimer, Clutch Guitar, Rear Suspension Spike Fiddle, Fender Bass, Hatchback Kick Drum, Handheld Gear Tambourine and Door Harp -- but you’ll have to wait until next Monday until the video is released.--Richard Yarrow

Modern diesel engines are unlikely to appeal to Americans despite rising fuel prices, General Motors vice chairman Robert Lutz predicts.

Lutz emphasized GM is developing a full range of diesel engines for use around the world. However, overall diesel penetration is likely to remain in single digits for the foreseeable future, Lutz said, dismissing claims by European automakers and suppliers that diesel has a bright future in the U.S. as fuel prices increase.

"Frankly in the United States, with diesel fuel the same price as (gasoline), I don't think that many Americans are going to pay a $3,000 or $4,000 premium for a modern diesel engine," Lutz said.

"On top of the normal diesel premium, you now have advanced emission systems. Unless we decide to eat the cost, which unfortunately we can't afford to do, I think customers are going to say, 'Wait a minute. At equal fuel prices I'm paying $4,000 more for this,'" he said. "It will not be like Germany," Lutz said during the question and answer period following a speech at the Automotive News World Congress in Detroit.

Consequently, the vast majority of Americans will continue to favor internal combustion engines that use gasoline, which are significantly cheaper than diesel engines, he predicted.

The penetration of diesel-powered passenger vehicles in will be "more like it is in Switzerland," 8 percent to 10 percent, at best, added Lutz, noting the tax system in the U.S. simply does not favor diesel power the way it does in Germany. In Germany and other parts of western Europe, the taxes on gasoline are much higher than on diesel fuel, which skews demand towards diesel motors, he said. In the U.S. gasoline and diesel fuel are taxed basically the same and thus cost the same at the pump. The emission standards in Europe also are not as strict as they are in the U.S., Lutz said.

"In those European markets where diesel exceeds 40, 50 percent or 60 percent penetration, you have to know there is a tax differential. Gasoline is $8 per gallon, diesel fuel is $4 per gallon," he said. "With that kind of price disparity everyone is going to buy a diesel.”

"In the countries where gasoline and diesel is about the same, percentages are much lower. They're much higher than they are in the States but they are down around 10 percent or 12 percent.

"I'm not advocating taxes hikes or calling for higher fuel prices," Lutz said. "I'm just explaining the difference between the European fleet and our own.”

"In America instead of raising fuel prices, we'll wind up raising new vehicle prices because of the increased use of lightweight material and fuel-saving technology. By the way, clean diesels do not come for free especially not when they are emissionized [to meet new standards], which mean thousand of dollars per vehicle and that in turn is going to cause people to hang on to their vehicle," he said. "People are going to say,'Whoa a $35,000 Chevy Malibu. I think I'll hang on to the one I've got for a while.”

Lutz also said the use of flex-fuel vehicles running on ethanol represents the best way to address the issue of U.S. dependence on foreign oil and the chronic insecurity it breeds. The wider use of ethanol as motor fuel could reduce U.S. dependence on imported oil, he said.

"Nothing we can do in the next five or 10 years gets even close to that kind of impact," he said.

Ethanol also is cleaner than gasoline and adaptable to the current re-fueling infrastructure, he said. It also doesn't require a major shift in consumer behavior, Lutz said.