Searching for China's Henry Ford

Everything from Bavarian Motor Works to Jonway Automobiles

????But there are loads of others you've never heard of. You can walk around the Beijing auto show and within five minutes see just how bizarre this market is: today I saw a new BMW convertible so luscious that you almost wanted to ask the nearly six foot tall, preposterously beautiful model sprawled all over it to move aside so you can get a better look at the car.

????Then I looked at the price tag: 1.95 million yuan. That comes to about $285,000, in a country where the average per capita income is about $2000 a year.

????Stroll over to the Jonway Automobile exhibit in the adjacent hall, and things get more interesting. What, never heard of Jonway Autos? Well, neither had I, and I've been living here for six years. It's based in Zhejiang province -- next to Shanghai.

????Jonway was promoting a new SUV for the equivalent of about $14,000. I'll bet that sells better than the BMW convertible that costs more than my house.

????Green acolytes in the United States and Europe will be very disappointed to learn how many SUVS are being produced by Chinese auto companies they've never heard of. The real environmental future may not be about the Prius but the offerings at the Beijing Auto Show.

State-owned car companies that aren't GM

????The chaos in this market will eventually end. But here it's not likely to happen for Henry Ford-like, game-changing reasons. The consolidation that will come to the Chinese auto market will be government driven, says Humphrey.

????Virtually every province is currently funding one or more of these companies. Even if they don't, they understand that companies like Jonway, in Zhejiang, provide jobs and tax revenue.

????Understand this: no significant auto capacity gets added or subtracted in China without government approval. Though the central government has said consolidation is needed, it can't just make it so. Everything will be negotiated. The provinces wield power in China.

????"If a company says it want to add capacity somewhere," says Humphrey, "it's likely that the government will say, don't build anything, just buy out this [smaller] competitor. It's not going to be private sector driven. Consolidation will happen over time," he says, "but it's going to be slow and deliberate. I think it's three to five years at least before you see [consolidation] in China.''

????That means profits will probably remain tough to come by for the big guys, even in a soaring market. As for me, I'm off to test-drive that Jonway SUV.