China’s Carmakers Need 10 Years Prep for Global Stage

Chinese automakers need to step up R&D spending to become world-class, and it will take them about 10 years to get there, an analyst at Sanford C. Bernstein & Co. tells Bloomberg News.

China's carmakers spend less than 2% of revenue on R&D about half the global average, according to the China Assn. of Automobile Manufacturers.

Bernstein analyst Max Warburton tells Bloomberg that SAIC Motor Corp. has the best chance of becoming a global competitor. He says the company has learned a "huge amount" from venture partner General Motors Co. Warburton adds that SAIC's engineers are more seasoned than those at other Chinese automakers.

Smaller, independent companies such as Geely Automobile Holdings Ltd. are gaining an impressive grasp of engine technology, Warburton opines.