China's car industry rapidly gaining ground on the West in a struggle for global supremacy

“Fighting with giants” is how one boss of the Chinese car industry describes his company’s battle to catch up and then overtake their more established global rivals.

He speaks in terms of “knife fighting”, from which there is “no escape” – “never quit” – and having thousands of soldiers trying to advance across “a single wooden bridge”. He sounds like a medieval general. He makes vans.

His name is Xu Qiuhua. He is another of those “big” personalities you always find in the car business – Henry Ford, Ferdinand Porsche, William Morris, Lee Iacocca, Soichiro Honda, Sergio Marchionne, Dieter Zetsche, Carlos Ghosn… Xu Qiuhua, who runs the Maxus division of the Shanghai-based SAIC Motor, will go far.

Such combative views on the Darwinian realties of survival in the car industry, even in private, are rare. Perhaps if such an uncompromising and single-minded approach had been taken by the chaps who used to run our own “native” car businesses, brands such as Austin, Morris, Hillman and Triumph would still be pouring out of British car factories.

It is rather like visiting a parallel universe, travelling as I did to see the Chinese car industry and the showcase Shanghai Motor Show – at which only a portion of the country’s 72 car makers are represented. It is an answer to the question: “What might have happened to what was left of the ‘indigenous’ British motor industry if it had had a huge dose of investment and the latest technology injected into it?”

The short answer is SAIC (Shanghai Automotive Industry Corporation), which, by a variety of chance circumstances has ended up with MG Rover – rebranded and repronounced after legal issues as Roewe and LDV, which used to make the Maxus van.

A half-century ago these famous names or operations were all part of the British Leyland Motor Corporation, at that time one of the biggest motor corporations in the world (fifth, in fact, by revenues, making over a million vehicles per annum – huge by the standards of the time).

By the 2000s after a terrible saga of decline, it has been dismembered. Now Jaguar Land Rover is (mostly) successful as part of the Indian-based Tata Group, and BMW, after a brief stewardship of the old group, has revitalised Mini (albeit both UK businesses face those notorious Brexit uncertainties). They’re still mostly in Britain.

Excepting a small engineering and design presence in Birmingham and London, however, the other surviving brands are in China under the ownership of SAIC, the parent company of SAIC Motor UK Technical Centre (SMTC UK), which looks after the “British” brands.

They are doing well too, which just adds to the sense of schadenfreude. After all, Sweden, Germany, France and Italy all managed to somehow hang on to national champions with extensive activities in high-cost western Europe – why not the UK?

What might have been…and also what might have been under the owners of MG Rover in the first decade of this country, who had a (slim) chance of securing a partnership with a Chinese group such as SAIC or Brilliance China Automotive, but instead found themselves pursuing some distractions of their own.

SAIC is hyperactive, launching a starry array of new models, many now independently developed by the Chinese group. Like the Japanese and Koreans before them, such local assembly operations facilitated transfer of technology and know-how into the local industry – Nissan once built Austin Cambridges, and Hyundai manufactured a version of the Ford Cortina.

SAIC too started out learning how to make vehicles decades ago through joint ventures with VW and General Motors, making obsolescent Santanas and Buicks. They also transported the assembly lines for the old Rover 75 and the LDV Maxus van from Birmingham over to China a few years ago.

Now SAIC makes 7 million cars a year, and with total revenues of $133.6bn (£103bn), yielding profits of $5.3bn (£4bn). By comparison, the entire UK car industry makes about 1.5 million cars, and the Chinese, even going through a bit of a downturn, buy as many new cars in one month as the British do in a year.

Set SAIC against Toyota, say. Toyota makes around 9 million cars a year, but has proportionately larger margins on its upmarket and more sophisticated products selling in developed, mature markets. Hence Toyota’s superior profitability – $23bn (£17.8).

SAIC, and the Chinese industry’s best hope of global dominance, is to leapfrog the German and Japanese-based firms to win the race for leadership in electric cars and autonomous driving, both areas where China has an early lead. It has the biggest lithium ion battery production in the world and has secured many of the minerals needed for the new technologies, such as cobalt and rare earth minerals. And we all know about Huawei’s controversial 5G expertise.

So China’s increasing technological strength means its cars have moved on from being cheapish facelifts of ageing designs such as the Rover 75 and LDV Maxus van, a vehicle that goes back to a joint venture with Daewoo nearly two decades ago.

That van is actually still in production at SAIC, as the Maxus V80, the assembly line having migrated from Poland to Birmingham and thence to Nanjing. There’s a nifty little camper van they’re promoting on this familiar shape. Some have been exported “back” to the UK. Yet lately it has been used by SAIC to test hydrogen fuel cells and driverless technology (which makes most sense for local van deliveries).

Now the old LDV design has been superseded by a smart all-new “V90”, which, like the Mercedes V-Class even offers buyers front- or rear-wheel drive, as well as petrol, diesel or electric propulsion, and a variety of body styles.

As unveiled at the Shanghai show, it appears class competitive with the likes of the Ford Transit – though only active use will determine whether it is durable. There are also question marks, as there have long been, about the safety of Chinese-engineered vehicles, a factor in their slow acceptance in richer markets.

Even so, the developments are continuing apace. SAIC is making the most of its portfolio of badges. Maxus, for example, has become a marque in its own right – with a new big people carrier, the D50, a rather slabby affair in the tradition of the Renault Espace, Kia Sedona and Toyota Picnic. This one-box family motor may have gone out of style in the west, but in China the relaxation of the so-called “one child” policy, plus an ageing population, may produce a stronger demand for such a vehicle

With MG, too, the Chinese firm is pushing its British roots ever more powerfully, using the Queen, the Beatles and Benedict Cumberbatch in its promotional efforts. The twist is an implication that this venerable but knackered British brand had to be rescued by Chinese technology.

There is something in that, I’ll admit.

Nowadays MG stands for “my glamour”, and is the sporty, funky end of the range. They’ve even revived the old “X-Power” and “Trophy” performance sub-brands from the Longbridge era. The latest slogan is: “Make MG Great Again.” Their new HS larger SUV and electric MG EZS make a case for that.

SAIC is, then, a typical Chinese motor company – massive but you might have never heard of it. It makes a huge range of vehicles, from a gigantic and well-appointed luxury SUV made with Roewe (the descendant of Rover) and MG badging through to utilitarian vans, lorries and, who knows, smaller electric and autonomous city cars in the future.

The Chinese are also busily developing hydrogen fuel cell technology – another zero-emissions method of propulsion, though arguably less energy efficient than pure battery power from mains electricity. They have a plant abroad, in Thailand, plus the usual test tracks, research and wind tunnel facilities. They can do most things on their own, with only transmissions being a major buy-in.

The only thing that is really holding the Chinese industry back is to achieve modern advanced standards of build quality and durability, and to catch up with the western makes in terms of secondary safety – protecting passengers in a smash. SAIC’s rival Geely, a private sector Chinese firm, has acquired Volvo, famed for its attention to safety, which should help.

Dongfeng Motor Group has taken around a 14 per cent stake in Groupe PSA (formerly PSA Peugeot Citroen), and SAIC Motor has about a 1 per cent holding in General Motors.

Daimler, parent of Mercedes-Benz, already owns a 10 per cent stake in BAIC, the Beijing Automotive group, and BAIC holds 10 per cent of Daimler. They have a joint venture to produce Mercedes-Benz cars in China, and the mutual advantages to build scale and diversity, reduce risks and costs and exchange technology is apparent.

So the links – financial, corporate and technological – between China’s rapidly advancing auto companies and the west’s more established brands are gradually growing tighter and more intricate. It is, for now, a more balanced relationship between east and west. Underneath, it is still a Darwinian struggle, though.