From being the wonder child of China’s economic growth, the auto sector is suddenly beset by problems on all sides. According to half-year reports, an incredible 90 per cent of car makers failed to reach the sales targets they set only six months ago yet most are continuing to expand production capacity.

　　The problems they face in the domestic market – primarily the slowdown in economic activity with resulting loss of consumer confidence, together with increasingly stringent measures to cut vehicle numbers and thus pollution in many cities – are not going to go away anytime soon.

　　Managing their way through these bumpy driving conditions is going to severely tax the managements of many of the indigenous vehicle makers but perhaps these pressures will finally persuade them to look beyond China for sales growth. Sadly, progress in winning export sales has been patchy at best and virtually invisible in the so called ‘developed’ auto markets of North America, Europe and Japan.

　　Of course, those markets themselves are in severe downturn – actually in recession in Europe. Yet those very reasons present considerable opportunities for the value brands which Chinese makers are expert in producing. However, winning sales in those markets is going to be hugely expensive and time consuming particularly since no Chinese maker has yet managed to begin the process of building a credible brand strategy outside China.

　　This aspect of their development seems to have escaped many Chinese makers. They’ve invested billions in factories and in R&D but – yet – virtually nothing in the other big area of necessary investment, brand building.

　　Indeed, my own experience with major China auto companies suggests that there is a fundamental – and potentially disastrous – lack of understanding of the importance in Western markets of brand, brand loyalty and customer brand perceptions. These areas are fundamental to success and take huge amounts of time – not to mention resources – to sort deliver.

　　Key examples are Toyota’s Lexus brand and Nissan’s Infiniti. In both cases these respected Japanese makers have spent many years (getting on for a quarter of a century for Lexus) in trying to promote these brands to Western consumers. They have great cars and cast iron quality track records. Yet, even now, neither brand commands the respect, integrity and success of, say, Mercedes, BMW or Audi. My point is that if Nissan and Toyota have spent all that time and money without achieving greater success then the Chinese indigenous brands have a very long way to go.

　　Now that times are hard at home then it would seem that this is the moment to begin work on establishing brand presence in key markets. There is no doubt that Chinese makers can do this once they set their minds to it (look at Lenovo for a good example in the IT sector) but the process just has to get underway.

　　There is no shortcut to success in brand building. It takes real effort to present a co-ordinated, cohesive image to the world and involves every marketing tool - PR, advertising, social media (increasingly important), corporate identity, dealer promotion etc. None of this effort will lead to sales success tomorrow but if the foundations aren’t dug then the house cannot be built.

　　So my message is that, in these times of slowdown in China, then it surely has to be the moment to look overseas for future development. It won’t be easy, It won’t be cheap. And above all it won’t be quick – due both to the slump in demand in many world markets and to the length of time to build a brand. But if you don’t start you are never going to get there!