Is China going to take over the world? We said the same thing about Japan back in the 1990's!
A reader writes, citing an article that shows China is now a net exporter of cars. Is this something to be worried about? I mentioned before how the Japanese made big inroads into the US market back in the 1970's - and the Koreans followed suit in half the time. Would China and India be next? After all, they already have imported Chinese and Indian made cars into the USA.
Could the Chinese "take over" like the Japanese and Koreans did? New tariffs have put that idea off, at least for the time being. One thing is for sure - China and India will be sources of auto parts for most cars made, worldwide. Your 'Merican pickup truck may have a lot of Chinese parts in it - particularly microchips. And your new Ford Ranger? Assembled in Mexico with an engine made in India.
The final assembly of a car is really the least important part - but the part everyone wants to see. It is the eye candy part, where metal stampings are welded together and then rustproofed and painted and then an engine and drivetrain installed and then all the trim and interior bits are added until, well, suddenly it becomes a car and rolls off the assembly line like magic.
In the old days of body-on-frame cars, the real "eye candy" part that factory tours liked to show was the "body drop" where the finished body (sans fenders and hood) would be rapidly dropped down from the floor above via a hoist, onto a waiting chassis. It was the moment that all those pieces became a car.
But making all those pieces is just as important as the sexy part of final assembly. And over the years, as I noted before, the "Big-3" automakers went from the Sloan "vertical integration" model, where, for example, GM made every part of the car, other than tires, motor oil, and the gasoline in the tank, to the Japanese-style captive-supplier "Keiretsu" model, where independent suppliers are pitted against each other for the lowest prices on every part. For some companies this means even body stampings are farmed out to local suppliers. As a result, assembly plants look neat and sexy, while the dirty work (e.g., casting and forging) is done elsewhere.
Initially, it may seem scary that China is exporting cars - it sounds like an alarming headline until you break it down. As a "net exporter" that means only that they sell at lest ONE car more than they import. But of course, they are starting to export more than that - just not to the United States (with one present exception).
Incidentally, Ford also dropped the ball in China - one of the few "foreign" car companies to not capitalize on the burgeoning Chinese market. Although I hear they are now making a Chinese-market version of the Mach-e in China, so maybe they will turn things around. Quite frankly, given the rise of nationalism in China and the emergence of Chinese-branded automobiles in that market, it may be seen as unpatriotic (and against the party!) to be driving a "foreign" make of car in the next few years there. At that point, GM may have to walk away from its investment, if it fact it is not nationalized by the Communist government in some sort of tit-for-tat diplomatic dust-up over Taiwan.