http://www.businessweek.com/magazine/content/10_07/b4166062314229.htm

Strategy & Competition

Japan's Car Guys Cross the China Sea


At age 72, Kiyoshi Kondo feels like he has discovered the fountain of youth. After four decades as an engineer at truckmaker Isuzu, where he focused on making vehicles better able to stand up to rough roads, he's taking on a new challenge: helping Chinese carmakers emulate the rise of the Japanese. "It is so much fun to teach," says Kondo. "China is like Japan 30 to 40 years ago."

For the past year, Kondo has regularly jetted off to Chongqing, the great metropolis of western China, to help out at Chongqing Changan Automobile. He has taught the company's engineers to calculate how many staffers are needed at various stages of model development, how to toughen their designs, and more. In one instance, he helped Changan figure out a sophisticated machine for testing the strength of a vehicle's chassis that was standing idle because no one knew how to use it. With his $550-a-day contract now finished, he says: "I want to go back again."

If Kondo doesn't make the trip, others certainly will. While in China, Kondo ran into compatriots from Toyota (TM), Mazda, and Mitsubishi doing similar work. At least 100 experienced Japanese engineers have worked with Chinese automakers recently, reckons Hiromi Shioji, an economics professor at Kyoto University. "If [the Chinese] want to improve the exterior of the car then they go to Italians, but for the guts they are looking to the Japanese," says Akira Ami, president of Global Business Support & Marketing, a consulting company that has sent Japanese engineers to China since 2002.

Some Chinese companies have even set up shop in Japan to tap into the smarts of the country's engineers. JAC Motors, based west of Shanghai in Anhui Province, opened a research center in Tokyo in 2006. The truckmaker has hired dozens of locals to help it develop passenger cars. "Japanese engineers have the mental strength to pursue a problem until it is solved," says Wenjun Wang, chief of the Tokyo center. "Young Chinese engineers don't have the same endurance."

There's plenty of work to be done. Beijing has long required foreign automakers in China to team up with domestic joint-venture partners. But the foreigners have been stingy with their technology, so Chinese manufacturers haven't learned as much as the leadership had hoped. Many analysts say it will take a decade or longer before the Chinese make cars that meet Western standards, though Kondo and others like him could help speed things up.

Courted as they are by the Chinese, the Japanese face plenty of cultural hurdles. Though most engineers say they were welcomed by the Chinese, some grouse that the Chinese approach to making cars is too different from Japan's for them to have much of an impact. The Chinese, says consultant Ami, tend to be assemblers, largely outsourcing vehicle development. Ami adds that it's common for the hired guns to be asked to help reverse-engineer Japanese cars—making it easier to copy designs—and that some have been asked to hand over the technology secrets of their former employers.

Kondo nonetheless thinks he has done the right thing. His work in China reminds him of the 1960s, when he learned the latest techniques in vehicle testing from Ford (F) on visits to the U.S. Back then, he says, he was thrilled that foreigners took the time to teach young Japanese engineers the basics of carmaking. "That's how we learned," he says. "I never dreamed then that I might become like them."

Rowley is a correspondent in BusinessWeek's Tokyo bureau.
Ueno is a reporter for Bloomberg News.
Hagiwara is a reporter for Bloomberg News in Tokyo.

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