Trendsetting: China Rising

I've used a lot of blog space to cover trends concerning China as an emerging powerhouse of both vehicle consumption as well as production. I think it's well deserved. This NYT article helps detail why.

Much like the financial, management, and labor troubles of the 1970s led to the consolidation and eventual failure of the British auto industry, the U.S.'s manufacturing base is in upheaval and seems likely to lose its predominance in the auto manufacturing sector, at a minimum. While I doubt the U.S. will lose it's world influence and might as a result (as the U.K. did), it's clear that we leaving a void and that China will be filling it. And I agree with the NYT article that it seems unlikely we'll regain the "lead."

What does that mean for us as consumers, or simply as citizens of the U.S.? In the long run, I think we'll continue to lose auto manufacturing jobs, although we might pick up foreign factories. (I assume you know that many Toyotas and Hondas are built in U.S. factories with U.S. workers, although most parts are still foreign sourced.) Look at BMW: they own Mini and engineer the Mini cars, which are mostly assembled in the U.K. rather than being sent to Poland or something. It is beneficial to the company to keep a British marque in the U.K.

There will also be less American cars on the road - that is, cars made by American companies in the U.S. This was happening long before the financial crisis hit - GM uses it's Korean subsidiary Daewoo to build small cars in Korea.

It'll take a while for the Chinese to want to build their factories here. Our labor costs are MUCH higher than native Chinese labor. But auto trends and preferences will change - no longer will American ammenities dictate global design requirements, as the article points out by noting the American trend for cupholders and the Chinese preference for chauffeur-driven cars.

Things are changing. Get used to China being a carmaker and a precedent-setter. Don't run for the hills, it'll be fine. But be on the lookout for protectionist and sensationalist nonsense, just to give yourself a laugh now and then.