Look around your house or your office. Pick up any random, mass-manufactured object and look it over for a country of origin. Chances are most of your stuff was made in China.
A quick inventory of a few of my possessions revealed that almost everything from my favorite coffee mug and my hand tools to my pocket calculator and my banjo were all made in China. But when looking around your world for Chinese-made consumer items, one huge, ubiquitous product is curiously absent – the automobile.
The future of the Chinese car in the North American market is the elephant in the living room for Ford, GM, and DaimlerChrysler. These companies all have very successful and numerous joint venture operations in China right now. They include Shanghai General Motors Co., Ford Motor (China) Ltd. , and Beijing Benz-DaimlerChrysler Automotive Co. But all of these ventures primarily, if not exclusively, are engaged in building cars for the rapidly expanding Chinese middle class.
After having depended on high-margin trucks and SUVs for so long, a sudden fuel-price-driven shift to smaller cars caught Detroit with its pants down. GM, Ford, and Chrysler need small cars and they need them now. The problem is the profit margin for small cars is razor thin so building them with UAW labor is a money-loser. Detroit solved this problem in the 1980s by partnering with Japanese companies to round out small car offerings. In the ’80s Japan was an up-and-coming contender in North America – now Japan has Detroit on the ropes. Time to find a new partner.
The question is not if Chinese cars will be imported to the US, but when they’ll be imported. So who will be first to bring a Chinese car to the US? The signs are pointing to Chrysler. Chrysler’s CEO Tom LaSorda is looking for a place to partner for the building of small cars – either in Asia or Europe. Sources inside the company have stated that Chrysler is in talks with China’s Chery Automobile Co. about a deal. But LaSorda is playing his cards close to his vest. All he’ll own up to is that China has not been “ruled out.”
Another potential importer on the horizon is Malcolm Bricklin’s Visionary Vehicles. Bricklin is the man who brought Subarus to the US, and with much less success, the Yugo. His latest scheme is to import cars made by Chery. He’s had trouble with manufacturing and with lining up dealers, but his latest predictions have Chinese-built cars on US soil by 2008 or 2009.
No matter how or when China enters the North American market, you don’t need a fortune cookie to tell you it will change the face of the industry forever.
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