Well, many people believe that India’s Tata Motors would finally bring low-cost cars into the American market. There were lots of false starts with companies like Daihatsu, Yugo, and others. Even companies like Hyundai later realize that if the cars were too low cost, they weren’t considered reliable enough, couldn’t pass all the regulations here in the US, and no one would buy them. Eventually they modified their brands to catch the eye of the American middle class and consumer. What about Chinese automobiles?
Well, I hate to say this but the unions in Detroit and elsewhere have completely taken advantage of the American consumer. People want reliable and cheap transportation, but Detroit just keeps building the same old stuff, and although it is more reliable today than ever before, it is also more costly. People are taking out loans for 84 months in some cases, and I’m sure no General Motors product will ever last that long, not without a lot of TLC and maintenance. The Japanese yen is also at an all-time low as of 2012 and 2013, and it appears to be going even lower. That low-cost currency gives them an advantage in building cars and bringing them here, or bringing the parts here for assembly.
You can bet that the Chinese want to capture the US auto market as well, and they’ve made big inroads towards that goal. There was an interesting article in the Wall Street Journal on April 29, 2013 by Colum Murphy “BYD’s Ticket: Made in USA” which reminded us that for the Chinese automaker to really sell cars here in the US it would have to make them here. In fact they are looking at the Palmdale area out in California to build assembly factories. Can you imagine a Chinese company putting a manufacturing facility in the United States, in California no less, one of the worst places to do business in our country (cite: Forbes Survey 2010).
BYD Motors has something that other automakers don’t have they are going to have Chinese money to make loans. In other words you can get a car loan, and the car at a very low interest rate and it will all be Chinese money. You will pay interest to the Chinese, and in essence they will hold your pink slip until you pay off that car. Of course the car will be a hybrid – it will be gasoline plus electric, or all electric. If you don’t think this will happen, then you are forgetting your history of how Honda brought their little Honda Car into our market, got their foot in the door, and has since sold 10’s of millions of automobiles over the last few decades.
I think history is about to repeat because the unions are so arrogant they don’t understand that Americans are tired of paying a high price for a simple car that goes from A to B, but of course why should I bother to school them in this reality, after all they didn’t listen to Charles Deming either. Please consider all this and think on it.