In the 10 years since China joined to the WTO, China’s motor industry has made dramatic progress – jumping from an output and sale of just two million vehicles a year to 18 million, a rate of climb which no other country in the world could have achieved. That’s remarkable progress and yet – in one sense – its been an easy ride.

　　I mean by this that Chinese manufacturers have had a ready and unquestioning market for their products – China’s booming economy has created a whole new generation of cay buyers but one which is largely uneducated when it comes to products, quality and above all brands.

　　So far these consumers have accepted levels of quality and indeed safety which their Western counterparts would have rejected comprehensively. They have also been happy to buy ‘clones’ of cars produced by Western and Japanese makers – and often outdated ones at that.

　　Now all of this is understandable in a new industry grappling to turn out every product it can. But its no way to build a truly competitive auto business for the long term future. I’ve been interested in the rise in specialist car websites like Auto Sohu and publications in China and these, although still only reaching a tiny fraction of Chinese car buyers, are a window on the external world. Their reporters now travel the globe to new car launches and auto shows and they are reporting on what other vehicle consumers can enjoy – original designs, ever safer and more economical cars, huge innovations in technology and all the rest.

　　As Chinese consumers become better educated they are going to demand these same benefits too and the way Chinese manufacturers can ensure they can deliver all of that is to win sales success themselves in the ‘developed’ auto markets of Europe, North America and Japan.

　　I recently attended the interesting Global Automotive Forum in Chengdu which had as its theme ‘from volume leader to innovation leader’ – a neat phrase which sums up the next challenge for Chinese makers. Because building cars which people want to buy is largely a matter of innovation (as well as safety and quality – something most Western makers already supply as standard). Designing cars which people want to drive and be seen in is a precursor to the development of the all important brand loyalty which Mercedes, Audi, BMW and the rest take almost for granted yet no indigenous Chinese maker has yet achieved.

　　The second decade of volume Chinese car manufacture will thus be much more about these factors than about production. Sales will stabilise (the rates of growth of the mid years of the first decade are simply unsustainable) and true competition will emerge – simply having a car in the showroom will no longer be enough.

　　Consumers will become hugely more selective and educated in making their buying decisions. While they may thirst for foreign brands at present that cannot last – they will want to buy Chinese once they can be satisfied that to do so is socially acceptable.

　　We all know that the Chinese are savvy folk – they will be sensible and measured in their choices and develop long-lasting loyalty to brands which meet all of their aspirations – for specification, for performance and for style. They will recognise, as their Western opposite numbers already do, that to copy is to abdicate design leadership; that to skimp on materials or technology is to be a loser; and to fail to innovate is to throw in the competitive towel.

　　So my prediction for the next decade for the Chinese motor markers is that it will be much tougher. They will need to win sales in markets they have not even dreamed of yet. And they will need to develop truly global brand identities which – slowly of course – will begin to emulate those with many decades of heritage and breeding. Can they do it? Yes of course! In fact, they’ll get there much quicker than their competitors from the other Asian tigers – Japan and Korea. But it won’t be easy.

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