Environmental Engineering Reference
In-Depth Information
above, SAIC had a prior joint venture with Volkswagen, Shanghai VW, which was tech-
nologically stagnant. Shanghai VW had been producing the same old version of the
Santana for many years with no updates at all. For the Shanghai GM joint venture, SAIC
wanted to use the Buick brand due to its greater name recognition in China, and so the
fi
rst model that was introduced was a Buick Regal (New Century) sedan, aimed at serving
the government/o
cial consumer market. The Chinese also insisted that GM establish a
technical center, and so the Pan-Asia Technical Automotive Center (PATAC) was estab-
lished as a separate joint venture to provide engineering services. The second model to be
launched was aimed at private consumers in the burgeoning Chinese middle class, and it
was a version of the Brazilian Chevrolet Corsa (which in turn was based on the original
German Opel Corsa), named in China the Buick Sail. This small compact sedan had dual
air bags and antilock brakes as standard features, a
rst for a compact car in China.
Although the Buick Sail was far from being a new technology, many modi
fi
cations had to
be made before it could be introduced to China, including modifying the suspension, cal-
ibrating the engine, altering exterior styling and so forth. Shanghai GM started produc-
tion of the Sail with 70 percent local content, the highest ever for a joint venture in China
at the time.
Production of Shanghai GM vehicles began in December 1998. At the same time,
China's
fi
rst tailpipe pollution control emission standards for passenger vehicles were
announced. The
fi
ect in 2000, and at that time,
China required all new vehicles to meet the Euro 1 emission control standard, which was
the standard required by Europe for European vehicles in 1992. Some of the big cities
went a step further and required Euro 2 standards, so Shanghai GM complied with the
more stringent Euro 2 standard, which was the level required by Europe in 1994. But, as
of 2000, Europe had already moved on to Euro 3 levels and the USA had imposed its Tier
1 standard, which was even more strict than European levels in some respects. Thus it
cannot be said that GM transferred environmental technologies to China comparable to
the ones they sold in the USA. GM argued that one reason why they did not was that fuel
quality was so much worse in China. Poor fuel quality harms advanced vehicular pollu-
tion control technology and makes it increasingly ine
fi
rst emission control standards took e
ff
ff
ective.
nal case of Chang'An Ford is the most recent. Chang'An Ford was established
in 2001, a joint venture between Chang'An Automobile (Group) Corp., based in
Chongqing, and Ford Motor Company of Dearborn, MI. Ford was risk averse due to
major concerns about intellectual property, and Ford was not willing to negotiate seri-
ously with Chang'An until after the Permanent Normal Trade Relations (PNTR) nego-
tiations between the USA and China were concluded as part of China's accession to the
Wo r ld Trade Organization. Among the many concessions that the USA sought, relax-
ation of restrictions on foreign investors in the automotive sector was a major point of
contention. The USA succeeded in dismantling many of the restrictions, including a key
provision that disallowed any requirements for technology transfer. After PNTR was
fi
The
fi
nally signed into law, Ford concluded its negotiations with Chang'An in April 2001. The
joint venture was split equally into a 50-50 ownership structure. For the
rst car model,
Ford was willing to transfer only the Ford Fiesta to its counterparts in China, and this
model was actually a 'Fiesta-based' Ford Ikon, which was already in production in
India. The Ikon-Fiesta model to be produced in China was essentially the same as the
one already being produced in India, other than being adapted for left-hand driving and
fi
