Wayne, MI-China could be the source of the world's next big car brands, but the country seems to be off to a slower than expected start, says Gunnar Herrmann, director of the Global C Platform at Ford Motor Co.

"The Chinese manufacturers are trying hard to get into the European market. Cost-wise they are quite attractive," he said in during a break during a set of briefings at the company's facilities last week. "But I don't believe they have the engineering expertise yet to drive it."

Is China a long term threat? Sure. Japanese and South Korean manufacturers came to the U.S. amid a raft of skepticism. High mileage, good word-of- mouth, and several years worth of brand advertising ultimately put them in the mainstream. Coda Automotive in the next few years try to launch a Sino-U.S. all-electric car in the states. When asked the China question, another Ford exec quoted the title of former Intel CEO's book: Only the Paranoid Survive.

Nonetheless, for now, there seems to be a mismatch between what the Chinese manufacturers produce and what western customers expect.

"What we need to worry about is how quickly they accelerate," he added. "But I expected a much faster response. They are still missing bits."

Ford's been on a publicity tour this year. Execs were in California earlier this year to show off all-electrics and discuss fuel efficiency. But with each meeting subtle nuggets on the strategy emerge. Other things going on at Ford:

--Diesel might be squeezed in the market, Herrmann speculated. Although diesel engines are quite efficient--Ford makes a diesel for the European market that gets 40 to 50 miles per gallon-diesel engines also spew particulate matter. As governments tighten particulate emissions regulations, diesels become more expensive.

"When you raise your emissions standards," it becomes more difficult. "I wonder if in a few years if diesel remains in Europe mostly as a performance option."

German car makers disagree. The House of Volkswagon said it sold out of diesel Audis and Volkswagons earlier this year in the U.S.

--One of the big selling points for Ford from now on will be gas mileage and efficiency.

"Fuel and energy is going to cost more," said CEO Alan Mulally. Between 2004 and 2009, Ford's fleet mileage average climbed 19.2 percent and average emissions dropped 16.1 percent. Granted, the company started with one of the lowest fleet averages, but it had the most improvement over that period.

--The shift toward energy efficiency will mean trucks and big SUVs will drop from 59 percent of the company's business to 39 percent by 2011 while cars will grow from 32 percent to 38 percent, according to Sue Cischke, Ford's Chief Sustainability Officer. Cross-overs, which are sort of like mini-SUVs, though will climb from 9 percent to 23 percent.  See more from her in this video:

--The company will come out with all-electric cars in 2010, plug-in hybrids two years later and more hybrids in general, most of the gains in efficiency will come through producing better gas engines. Mulally called internal combustion engines the "bedrock" of the company's strategy.

The central technology for that strategy is the EcoBoost engine, which sort of functions like a diesel but consumes regular gas, said Nizar Trigui, the powertrain program manager at Ford. EcoBoost can increase fuel economy by 10 to 20 percent while dropping emissions and boosting many aspects of performance. A Ford Fusion with an EcoBoost on the market already saw a 20 percent increase in mileage and 15 percent drop in carbon dioxide emissions.

To date, Ford has sold six cylinder EcoBoost cars on the market. In 2010, it will come out with a four cylinder 2.0 liter version for cars in Europe, China and the U.S., a 1.6 liter for Europe and variants of the six cylinder for trucks. By 2013, 90 percent of the nameplates, or makes of cars, will have EcoBoost offerings, up from 23 percent in 2010 and a whopping zero percent in 2008.

--Improving mileage will also be accomplished thorugh reducing weight in cars by 250 to 750 pounds, reducing the rolling resistance on tires and intricate design tricks, such as coming up with more efficient ways to channel air over the engine to keep it cool, Trigui said. In the latest Fusion, the radiator is 1/3 the size. Swapping a magnesium and aluminum alloy for steel on the lift gate of a Lincoln cut 40 percent of the weight of that part and inched up fuel efficiency.

"All of these are little one percenters," Trigui said. "We treat every joule as a precious commodity."

--Hybrids and electrics. The company's got a bunch coming out. Hybrids now make up about three percent of sales. Ford will sell 50,000 hybrids this year, a big jump from the usual 25,000. But by 2020, hybrids, plug-in hybrids and all electrics could make up 25 percent of all cars sold. (The majority, however, will be regular hybrids.)

"The reason we don't have millions of hybrids on the road today is the cost," said Sherif Marakby, chief engineer for global hybrid core engineering.

As battery prices go down, the cars will become more attractive. Potentially, up to 30 percent of the cost can be covered by re-selling slightly depleted batteries back to utilities.