GlobalAutoIndustry.com Exclusive Interview: ''China More a Threat Than Opportunity for Auto Industry''

TROY, Mich.--May 15, 2006--GlobalAutoIndustry.com:

    Three major challenges

    "China is more of a threat than an opportunity to the global auto
    industry," says Graeme Maxton, automotive economist with the
    Economist Group and Managing Director of Autopolis in Asia.
    Maxton, speaking in an exclusive GlobalAutoTV video interview for
    GlobalAutoIndustry.com says that there are three major challenges
    facing foreign firms in China.

    A clear Chinese agenda

    He says that although the market is growing rapidly and will
    continue to expand quickly, China is developing its own
    capabilities fast. "Foreign firms need to understand that this is
    often government sponsored," says Maxton, "that there is a clear
    agenda." He points out that there is legislation which clearly
    states that China will develop its own auto sector, free from
    foreign control. "This is very explicit," says Maxton. The second
    major challenge is for investors to accept that they will lose
    their intellectual property -- "if you are not ready for that, you
    are not ready for China," he says. This means, in effect, that
    investors are helping domestic Chinese firms to learn.

    With different economics

    The third issue that firms need to think about is economics.
    "Chinese firms are able to build cars at cost levels that are far
    below the levels of most global firms," he says. "Car companies in
    China are already able to sell mid-size cars for $6,500," says
    Maxton "and with a claimed breakeven level of just 8,000 units a
    year." He says that it is not important whether or not the
    economics make sense. What is important is that they are doing it.
    "That's what investors need to worry about," he adds "they should
    be asking themselves: how can we compete with that?" 

The full exclusive GlobalAutoTV video interview will be shown at the China Seminar held by GlobalAutoIndustry.com at the Troy Marriott (Troy, Mich.) on May 17, 2006.

The full interview will also be available on the internet on Wednesday May 17 at http://www.globalautoindustry.com/tv/index.php#about

Journalists: A short video excerpt from the interview is available at: http://www.globalautoindustry.com/tv/index.php#about

GlobalAutoIndustry.com is the leading worldwide portal and intelligence source for the automotive industry.

For more information contact Ron Hesse at 248-526-3312 or RHesse@GlobalAutoIndustry.com.