The Sinica podcast recently on the Chinese auto market noted that the Chinese share of the private auto market had been steadily growing for years. Then in 2011 it, surprisingly, not only did not grow, but it took a small step backwards. 70 % was foreign branded and now 71+% is foreign branded. Check out their podcast here. Chinese consumers looking for safety, innovation, style and value are buying foreign brands and even in greater numbers. The state owned companies despite strong support from the local and national government are not showing they have the stuff.
In computers, the Legend computer group in Beijing had to buy the IBM Think Pad and sell it as the Think Pad to win market share in China. Just selling Legend was not working to get them there.
Sinica noted that the Chinese companies are facing an uphill climb as the consumers are already convinced that foreign is better. Chinese companies must one by one try to win them back.
So Western companies have a natural advantage now. It is time to move and not just in products, but also in services.
Do go to China Business Leadership Group at LinkedIn to add your thoughts.