Is China the future, or the end, for the Big 3?
Is BYD just the beginning?In recent years, GM's Buick brand has been a top selling brand in China, but will that always be the case?
In China, according to a recent Investors Business Daily article, there is growing pride in home grown automakers, such as BYD - the automaker in which Warren Buffett recently invested $230 million because he believes it will be the world's largest automaker by 2025. Moreover, there are many other emerging Chinese automakers, such as Chery, that might just be a Volvo buyout away from gaining even America acceptance.
But is America even important to China? Not really. Sure, as a matter of pride selling in America is nice, but it's not the future. The Chinese new vehicle market is destined to be far bigger, and more important, than the American market.
On the other hand, the American market hasn't been very profitable for the Big 3 in recent years. Instead, most profits are derived from foreign markets, and places like China and India are seen as the future for the Big 3.
Finish: Is China the future, or the end, for the Big 3
Labels: byd, Hybrid Vehicles
posted by Dahcredyns at
8:29 AM
3 Comments:
Full Story
In recent years, GM's Buick brand has been a top selling brand in China, but will that always be the case?
In China, according to a recent Investors Business Daily article, there is growing pride in home grown automakers, such as BYD - the automaker in which Warren Buffett recently invested $230 million because he believes it will be the world's largest automaker by 2025. Moreover, there are many other emerging Chinese automakers, such as Chery, that might just be a Volvo buyout away from gaining even America acceptance.
But is America even important to China? Not really. Sure, as a matter of pride selling in America is nice, but it's not the future. The Chinese new vehicle market is destined to be far bigger, and more important, than the American market.
On the other hand, the American market hasn't been very profitable for the Big 3. Instead, most profits are derived from foreign markets, and places like China and India are seen as the future for the Big 3. Yet, once Chinese automakers catch up to the the majors, what do the Big 3 offer?
Furthermore, if the future of the auto is the battery, then China is far ahead of the US. No, it's not because BYD beat the Big 3 to plug-in vehicles. Rather it's the fact that China already has a robust and advanced battery manufacturing industry, including lithium mines, as well as cheap labor and hordes of engineers.
And, even when it comes to battery-powered vehicles, just how serious are the Big 3 really?
At both the LA and Detroit auto shows, the US auto media made a big deal about how the Big 3 were trying to beat the Asian automakers at their own game, particularly with cars like the Ford Focus and Chevy Cruze.
That might be a good move, but it might just be too little too late. By next year, Toyota wants to double its hybrid production, and that increase in production will largely be forged with small hybrid vehicles that could make the Focus and the Cruze appear like yesterday's technology.
So, from where will the Big 3's profits come? Selling gas-guzzlers in China? Hybrids and EVs? Perhaps the later is possible, but only if built in China. And, if the Big 3 are only profitable by building vehicles in China for the Asian markets, does the location of their world headquarters really matter that much anymore?
Indigo Incarnates
Thanks to the one-two punch given to America by Bush and Obama, we're going to be a Third World nation by the end of the decade. Why should China care? Their only investment is the T-bills that will likely be rendered worthless.
I have to admit that I'm not all that bullish on the US economy these days either, but I do believe things could soon turn around. And, as you point out, China does need the US to be somewhat successful - maybe we'll only fall to 2nd world status. LOL.
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