As usual, BYD is the company that steals the thunder, with the showcase of its Ti+DCT technology. Ti stands for turbo-charging and direct fuel injection, the two new directions of engine development pioneered by Volkswagen, which it calls TSI. DCT is the dual clutch transmission, a recent form of automatic transmission popularized by Volkswagen, again in China, although it calls it DSG.

Catch up

Call it catch-up, call it copycat, whatever it is, it is meant to compete head on with the latest 1.4 liter TSI+DSG powertrain package found on many VW models including Sagitar, Bora, Golf and others. The only problem is BYD's Ti+DCT is still in the lab, while VW's TSI+DSG is on the road. My guess is that the technology gap here is two to three years.

Chery's turbo-charging and direct fuel injection technologies were already on display at last year's Beijing Auto Show. At the Shanghai Auto Show, it is boasting an alternative new automatic transmission technology called Continuous Variable Transmission (CVT). Now CVT has already been deployed on some Nissan cars in China. So again, Chery is playing the catch-up game.

In areas of new alternative technologies, the emphasis is on all-electric cars, as this is the direction trumpeted by the Chinese government. All of the three musketeers came with all-electric cars.

It seems to me that all the indigenous companies place a large amount of emphasis on self-developing core technologies. Chery, the poster-child of China's indigenous auto policy, has been investing regularly 10 percent of its revenues in R&D for many years.

But even if Chery, BYD and Geely are able to close the technology gap with their giant global competitors in a short period of time, they still face an uphill battle that may take many years of relentless effort. Each has its own problems that are difficult to overcome.

BYD seems to be the victim of its own success. As the company is stretched thin with its rapidly increasing sales, product quality and dealer relationship are starting to see difficulties.