Posted on 06/11/2005 6:46:30 AM PDT by voletti
Korean cars gave Detroit fits in the late '90s by undercutting domestic small cars on price and outdoing them on quality -- then moving up into other segments. Autos from China could provide more lower-cost competition for the Big Three at a time when GM and Ford Motor Co. (F ) are already reeling. That could cost them, along with Chrysler (DCX ), more market share and prod them to move more of their own production offshore.
How fast can the Chinese gear up? The way things are going, it won't take 20 years to match Toyota Motor Corp. (TM ) quality levels, as it did for the Koreans. And with Chinese auto assembly workers earning $2 an hour -- vs. $22 in Korea and nearly $60 in the U.S. for wages and benefits -- it may not be long before China has the wherewithal to start selling competitively priced cars overseas. "The Chinese are probably five or six years away from being able to sell a competent low-end car," says auto analyst Maryann N. Keller.
The Chinese government is putting its heft behind the export push -- subsidizing the export drive of such local players as Chery and giving the likes of Honda big incentives. Beijing also is nudging foreign auto makers to divert investment into export production so local partners can become familiar with managing foreign-exchange risk and global supply chains. It's also pushing domestic companies such as Chery, Geely Auto, Brilliance China Automotive (CBA ), and Shanghai Automotive Industry to develop their own brands overseas.
(Excerpt) Read more at businessweek.com ...
From May 2004:
Houston Partners to Bring Chinese Vehicles to Texas
Their names are Solo, Deer, Leopard, Safe and Sing, and thousands of them are on a boat headed this way.
U.S. car buyers will soon have a new option: very-low-priced Chinese cars, trucks and SUVs.
Four Houston partners will be exclusive dealers for two major manufacturers of Chinese cars for the entire state of Texas, with the first dealership scheduled to open in the city this summer.
China Motors of Texas will import automobiles made by Geely and trucks and SUVs made by Great Wall, China’s leading manufacturer of such vehicles.
Cars will sell in the range of $7,000 to $11,000.
The manufacturers and dealers are hoping Americans will embrace these new import brands like they did the Toyota -- as opposed to, say, the Yugo, a Yugoslavian import that came to the United States in 1985 with high hopes but flopped so badly it became the butt of jokes.
Auto industry observers say that any consumer love affair with these Chinese products will not develop overnight, no matter how good the vehicles are.
But Ken Rams, CEO of China Motors of Texas, is optimistic.
"We feel the timing is perfect for this," he said.
"Most of the other manufacturers have abandoned the low, entry level of the price market," said Rams, noting: "Chinese car makers are committed to becoming a world force."
Geely and Great Wall are privately owned companies in mainland China.
There will be 24 other China Motors dealers in 13 states.
Rams gave some speculation on pricing. The Geely sports sedan, called Solo, will cost $10,888 fully equipped with leather seats, power windows, a remote control entry system, CD player and wood trim. A fully-equipped Solo sedan is $8,888.
Some pickup trucks sell for $7,900, and subcompacts cost $6,900. The prices for the SUVs have not been announced.
Geely offers 3-cylinder and 4-cylinder engines, made in China, as well as a V-6.
Like a charming immigrant still learning the culture, the Web site for Geely USA offers some delightful car descriptions.
For example, it notes that the Solo gives its drivers a special feeling, "making you relaxed and happy. Uneasy no! Lost, no! Fashionable life, and fashionable car!"
As for the Geely sports car, the Leopard: "The infinite vital force and the excellent driving feeling heats up your endless enthusiasm in your blood vessels."
Geely’s U.S. operation is so new that the English version of the company’s Web site still identifies the cars by their Chinese names: The Leopard is called the "Beauty Leopard," and the Solo goes by "Merrie" and "Haoging."
How enthusiastic will Americans be for these Chinese vehicles?
"There have been many successful foreign car arrivals in the U.S., but we also remember the Yugo," said Paul Taylor, chief economist for the National Automobile Dealers Association.
The ability to inspire confidence in the durability of the vehicle and the availability of service networks are the keys to winning acceptance among American consumers, Taylor said.
"The Koreans (Kia and Hyundai) dealt with it by giving very long-term warranties and low pricing," he said.
Low-priced Korean vehicles like Kia and Hyundai compete mostly with used cars, Taylor noted.
China Motors vehicles should appeal to consumers who want a new car and warranty at "a low, low price," said Brian Moody, road-test editor at Edmunds.com, a Web site for car buyers and sellers.
The Chinese vehicles won’t be competing with Japanese products because manufacturers like Toyota and Honda have moved up-market: "The Civic and Corolla were once bargain-basement priced, but they’re not cheap anymore," Moody said.
"Now it’s Kias, Hyundais and the Dodge Neon that are among the very inexpensive products. That should be where the turf war is with the Chinese cars."
Winning over car buyers will be an uphill battle for China Motors, Moody said.
Their vehicles may be first-rate, he said, but they’ll be entering a U.S. market where they’re unproven, and car buying is greatly based on reputation.
"Just ask people at Kia. The Kia Optima is a great value," Moody said, "but the public’s perception of the car lags far behind the actual quality of the product."
China Motors cars and trucks are made in China at new plants using state of the art technology, Rams said.
All vehicles come with a free 36-month or 36,000-mile bumper-to-bumper warranty. For $495 the buyer can get 36 more months, Rams said.
China Motors will have a service department, and any auto shop that repairs Japanese cars will be able to fix Chinese vehicles, said China Motors partner Ted Jonick.
After opening the Houston dealership, most likely near The Woodlands, the partners plan to open a San Antonio operation, followed by the simultaneous openings of two more Houston dealerships and one Dallas showroom.
Rams is a 42-year veteran of the car business. His Ford and Dodge dealerships were in California and Michigan.
In 1985, he gave up cars for greeting card distribution and consulting.
Over the past few years he’d been wanting to get back into the auto trade but said he could not find anything that had significant potential.
Through the Internet he learned that Geely and Great Wall were headed this way, and he contacted the distributor.
His other two partners are Randy Fernandez and Bill Kesler.
David Shelburg, 75, is an executive the North American division of China Motors, based in Phoenix. His son David Shelburg Jr. is president of the company.
The elder Shelburg was previously a dealer for American Motors, and going back much further, the Kaiser. He also helped bring the Subaru to the United States.
Shelburg has visited the Great Wall and Geely factories, and he noted that at the plants, only women do fitting and finishing work on interiors because in China, he said, it is believed that women are more precise than men.
We already have those laws in many states...And still, American industry has been and IS still leaving for China from those states...Nice try though...
Oh ok! I see what your talking about,
thanks for claryfing for me
You figure they should make 10??? And the other 50 should go to the stockholders???
Well said. And they expect their investments in foreign countries to have economic government guarantees and to have the protection of our military. Their idea of 'free trade' is government to government lobbyist deals.
How many illegal aliens do you suppose work in 'union shops'??? I'd say probably none...It's lookin' to me like we could use far more unions...
See post# 63, he clarified what the article was talking about.
Your smug, baseless arrogance is breathtaking!
The white collar sector is already witnessing the evaporation of jobs to India and SE Asia.
The only tools the American worker is destined to need are hamburger flippers and bed pans.
I guess this means Wal-Mart is going to start selling cars.
When we are at that, do not forget to send your regards to Popes Leo XIII and John Paul II
You said:
"People who offer their services in a free market are not slaves or servants - they are traders. Work - and you are paid. You do not need to work for me or anyone in a free society. If you choose, you can learn how to create things that other people desire."
So you are saying that people who "work for [you] or anyone in a free society" DO NOT CREATE? You are repeating the classic freemarketeering error reducing human labor to a mere commodity!
You said:
The honest efforts of working people is always noble because it reflects the desire to earn things rather than demand them by reason of need.
No, the desire to earn/get things is not noble. Another freemarketeers error. The noble is creating things and things are created by human labor, whether by the labor of worker or by the labor of employer in capacity of the manager/leader. Living off dividends, usury and speculation (like stock trading) is not noble(although sometimes justified).
You said:
Every advance in the human condition since the beginning of time is due to three things: the rule of law, the right of property, and the free exercise of the human mind. These have been guaranteed in practice only by constitutional republics, democratic institutions, and by competition.
This is hilarious!!! Human history is MUCH LONGER than freemarketeers imagine. And CERTAINLY "constitutional republics, democratic institutions" did not exist "from the beginning of time".
OK, let me provide a few quotes from Laborem exercens:
Through work man must earn his daily bread and contribute to the continual advance of science and technology and, above all, to elevating unceasingly the cultural and moral level of the society within which he lives in community with those who belong to the same family. And work means any activity by man, whether manual or intellectual, whatever its nature or circumstances; it means any human activity that can and must be recognized as work, in the midst of all the many activities of which man is capable and to which he is predisposed by his very nature, by virtue of humanity itself.
Man is made to be in the visible universe an image and likeness of God himself, and he is placed in it in order to subdue the earth. From the beginning therefore he is called to work. Work is one of the characteristics that distinguish man from the rest of creatures, whose activity for sustaining their lives cannot be called work. Only man is capable of work, and only man works, at the same time by work occupying his existence on earth. Thus work bears a particular mark of man and of humanity, the mark of a person operating within a community of persons. And this mark decides its interior characteristics; in a sense it constitutes its very nature.
[...]
Church considers it her task always to call attention to the dignity and rights of those who work, to condemn situations in which that dignity and those rights are violated, and to help to guide the above-mentioned changes so as to ensure authentic progress by man and society.
[...]
The ancient world introduced its own typical differentiation of people into dasses according to the type of work done. Work which demanded from the worker the exercise of physical strength, the work of muscles and hands, was considered unworthy of free men, and was therefore given to slaves.
By broadening certain aspects that already belonged to the Old Testament, Christianity brought about a fundamental change of ideas in this field, taking the whole content of the Gospel message as its point of departure, especially the fact that the one who, while being God, became like us in all things11 devoted most of the years of his life on earth to manual work at the carpenter's bench. This circumstance constitutes in itself the most eloquent "Gospel of work", showing that the basis for determining the value of human work is not primarily the kind of work being done but the fact that the one who is doing it is a person. The sources of the dignity of work are to be sought primarily in the subjective dimension, not in the objective one.
Such a concept practically does away with the very basis of the ancient differentiation of people into classes according to the kind of work done. This does not mean that, from the objective point of view, human work cannot and must not be rated and qualified in any way. It only means that the primary basis of tbe value of work is man himself, who is its subject. This leads immediately to a very important conclusion of an ethical nature: however true it may be that man is destined for work and called to it, in the first place work is "for man" and not man "for work".
[...]
It was precisely one such wide-ranging anomaly that gave rise in the last century to what has been called "the worker question", sometimes described as "the proletariat question"
[...]
Following tlle lines laid dawn by the Encyclical Rerum Novarum and many later documents of the Church's Magisterium, it must be frankly recognized that the reaction against the system of injustice and harm that cried to heaven for vengeance13 and that weighed heavily upon workers in that period of rapid industrialization was justified from the point of view of social morality.
This state of affairs was favoured by the liberal[free market] socio-political system, which, in accordance with its "economistic" premises, strengthened and safeguarded economic initiative by the possessors of capital alone, but did not pay sufficient attention to the rights of the workers, on the grounds that human work is solely an instrument of production, and that capital is the basis, efficient factor and purpose of production.
See more in Laborem exercens
Labor is not a commodity - it is an essential activity of a human being who is made in image of God. God worked six days creating the world and He worked as a carpenter when He assumed the human nature.
A constitutional republic!
You don't live in New Hampshire, you live in your own little world.
American auto companies 'and the unions' have been using robotics for over 30 years...Foreign auto companies cannot make that claim...
Are you suggesting that we don't live in a constituional republic?
No. The constitution is nothing but a piece of toilet paper. Congress only give lip service to it.
Here's a little pearl of wisdom that might point you out of the darkness: The desire to obtain things is neither noble nor ignoble. The desire to earn that which you want by honest work and free exchange of value is a good. The urge to take things that do not belong to you is a manifestation of evil. (see: Thou Shalt Not Steal - I'm no theologian but I think that predates Catholicism). Just because you want something does not give you the right, under color of God or Government to take it from me.
Live Free or Die. And I mean it.
The fact that Congress fails to fully abide by the Constitution (and I would say the judiciary is more at fault than Congress) does not deprive it of its force. We the People have rights under that document that we usually choose not to exercise, such as "altering and amending" the Government when it fails in its obligations to protect our freedoms.
The Free Market Fundamentalists qualify for a good auto-da-fe! Where is the Inquisition when we need it?
Nobody expects the Spanish Inquisition.
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