BYD

A Chinese automobile company that has caught my attention recently. It may beat Toyota or GM to the race for the next-generation automobiles. Who knows. But Warren Buffet seems to think so. The company's stock is traded in Hong Kong Stock Exchange (ticker number 1211), and the share price at the close yesterday was HK$16.98 (about US$2.19).

Warren Buffet takes charge...in an entrepreneurial Chinese auto company

What's interesting to me is the CEO's approach to manufacturing. Definitely a uniquely-Chinese advantage: sheer manpower.

"BYD's breakthrough came when Wang decided to substitute migrant workers for machines. In place of the robotic arms used on Japanese assembly lines, which cost $100,000 or more apiece, BYD actually cut costs by hiring hundreds, then thousands, of people.

"When I first visited the BYD factory, I was shocked," says Daniel Kim, a Merrill Lynch technology analyst based in Hong Kong, who has been to the fully automated production lines in Japan and Korea. "It's a completely different business model." To control quality, BYD broke every job down into basic tasks and applied strict testing protocols."

I tend to dismiss any Chinese manufacturing as "poor quality". But I'm open to the idea that their "quality" may be improving, at least in certain sectors and companies. After all, Japanese-made products were known as junk for quite a while before they became synonymous with "high quality".

Combine that with the news that Chinese Reserve Board has been hoarding metals for the strategic industries, and it is getting very interesting.