How Chinese Tastes Are Affecting America's Cars

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Source: Ford Motor Co.The roomy and opulent backseat in Ford's Lincoln Continental Concept is intended -- at least in part -- to give the production version of the new Continental a leg up in the huge Chinese market.
Not long ago, automakers designed their cars for regional markets. The Ford (F) Focus sold in the U.S. last decade was a different car than the Focus sold in Europe, because Ford believed that customers in Europe wanted different things in a small car than its American customers did.

Lots of automakers took a similar approach. But that has changed. Ford's current Focus -- along with most of the rest of its lineup -- is sold all over the world, with just minimal changes to meet the needs and legal requirements of each region.

It's the same story at most other automakers, because developing one model for the whole world results in better, more competitive cars. And that means that American tastes and preferences are sometimes taking a backseat to those of other regions -- especially China, which is now the world's largest new-car market.

So what does that mean for our new cars?

Backseats Are Getting Roomier

For the most part, it doesn't mean anything bad, because Chinese car buyers value the same things that Americans do. But there are some differences.

Consider this: If you've been in the backseat of a new Honda (HMC) Accord or the latest version of General Motors' (GM) Chevy Malibu, you may have noticed that cars seem to be getting roomier backseats lately. There's nothing wrong with that. But if you step back and think about it, that might be a little surprising: In America, we mostly put kids in the backseat. Why would automakers invest in extra legroom for kids?

The answer is that it's a different story in China, where both vehicle models (and many others that are familiar to Americans) are also sold nowadays. In China, it's not just kids that ride in back. Elder family members often do, too. That has made a roomy and comfortable backseat a strong selling point in that market.

It's even more important with upscale or luxury models: Often, well-paid professional folks who work in China's big cities will hire drivers so that they don't have to deal with urban China's notorious traffic jams. That means the owner rides in back -- and that makes the backseat especially important on such models.

Ford recently showed off a "concept" version of the new Lincoln Continental that will roll out next year. The concept will differ from the production version in its details, but one detail that isn't expected to change is the backseat: It's huge, almost limousine-like, with reclining seat backs and a whole host of amenities.

That's expected to be a big selling point in China, where the new Continental will be a key part of Ford's strategy to boost the Lincoln brand's presence in that huge and crowded market. And Ford figures Americans won't mind having the extra space -- particularly if the new Continental ends up gaining popularity as an airport or business limo.

Effects on New Models and Styling

But Chinese tastes are affecting automakers' global models in more ways than just the backseat. Over the last several years, GM's Cadillac brand has drawn attention (and generally, admiration) in the U.S. for its edgy, sharp-edged "Art & Science" styling.

But the styling of the brand's most recent models is softer, toned-down. That's partly because the hard-edged look wasn't playing well in China, where smoother, rounder Audis are the luxury-market leaders. Cadillac's latest efforts aren't copies of Audis, but newer models like the CTS and XTS are more subdued, less edgy than their predecessors. That's because Cadillac's designers have to consider Chinese tastes as well as Americans' now.

It's also affecting the models that automakers choose to introduce. From an American perspective, Mercedes-Benz's small CLA sedan seems like an odd product. The CLA is a small front-wheel-drive sedan that starts at just over $30,000: Won't that cheapen the august Mercedes brand?

Not necessarily in China, where the German luxury brands have tremendous appeal -- and Japanese brands like Toyota (TM) and Honda haven't been able to get much traction in the last few years. That has given the German brands an opportunity to bring younger and less-affluent Chinese buyers into their folds with products like the CLA.

Sometimes, though, it's the American influence that Chinese (and other overseas) buyers want.

When American Cars Stay American

For years, Ford's Mustang was only sold in North America and a few select overseas markets. That has changed, and the current model, new for 2015, is being rolled out all over the world.

But it hasn't been tweaked for Chinese (or European tastes): It's better-built and more refined, but it's still the Mustang that Americans have known and loved for decades. That was a deliberate choice, former CEO Alan Mulally told me in an interview when the new Mustang was launched. Ford's research showed that buyers in China and Europe wanted the Mustang in its all-American form, rowdy V8 engines and all -- not a product tailored to their markets, he said.

Long story short: For the most part, Chinese car-buyers want the same things that Americans do: a safe, reliable, fun-to-drive car in a good-looking package at a reasonable price. But automakers now need to take Chinese buyers' needs and tastes into consideration when designing new models -- and even if the influence is subtle, that is already changing the cars we can buy here in America.

Motley Fool contributor John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days, and click here to check out our free report for one great stock to buy for 2015 and beyond.
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