The Truth About Cars » China

Gordon G. Chang: China’s Car Sales Are a Fraud

Bertel Schmitt — Fri, 23 Oct 2009 18:11:09 +0000

If right-wingnut Glenn Beck needs a China hater on the tube, he usually calls Gordon G. Chang. Chang is always good for talking bad about China. In 2001, Gordon Chang published a book titled. “The Coming Collapse of China.” In it, he predicted that China would implode by 2006, if not earlier, due to the [...]

Editorial: Where’s The Yellow Peril?

Bertel Schmitt — Sun, 18 Oct 2009 18:48:58 +0000

A year ago, the 21st Century Business Herald reported that SAIC might buy GM and Dongfeng might buy Chrysler. TTAC was the first to break the story in the USA. As a result, our servers melted down, and we were accused of driving down GM’s and Chrysler’s stock price. Usually, buyout rumors drive prices up. But GM and Chrysler had only one way to go: Down. Months later, GM and Chrysler went bankrupt. They became a ward of the US government. Chrysler was given away to Fiat. GM was trimmed down to the barest minimum and is still owned by the US government. And the China story turned out to be a myth. Following this, stories of Chinese car companies buying US car companies became a regular staple. Up to now, it is mostly talk and little action.

Editorial: Trade War Watch 1: Yes, We Can Start a Trade War

Bertel Schmitt — Sat, 12 Sep 2009 12:33:27 +0000

President Obama paid his outstanding union dues and slapped a 35 percent punitive tariff on Chinese car and light truck tires exported to the USA. The new duty will take effect on September 26 and comes in addition to an existing 4 percent duty, Reuters reports. Everybody, except for the United Steelworkers, agrees that this is one of the most boneheaded decisions of the new administration.

Editorial: What Would Deng Xiaoping Do?

Bertel Schmitt — Wed, 17 Jun 2009 09:07:56 +0000

China is becoming the new America, while America is becoming the old China. Jack Perkowski thinks it's happening right now. Jack is an Old China Hand and a colleague in the automotive parts business. He's an American, and a Yale graduate. 15 years ago, he came to China and started ASIMCO, an auto component manufacturing company. In January, Perkowski left the company. The global decline in the business didn't spare ASIMCO. Perkowski is a true Lao Wai, which literally translates into "Old Foreigner" in Mandarin. From one of the first in China, we inherited a lot of his experience. Some is chronicled in Perkowski's book Managing the Dragon, which made the best seller lists. Most is regularly updated in Perkowski's blog that goes by the same name. In a recent post, he left us some interesting thoughts. Some may find them revolting, even seditious.

Editorial: Beijing Tells Hummer to Buzz Off

Bertel Schmitt — Sat, 06 Jun 2009 08:31:30 +0000

China's central government clearly isn't enthralled with Tengzhong getting intimate with Hummer. If you want to get a feel for how they really feel, all you need to do is read Xinhua, their official news agency. Xinhua speaks for China's government - with plausible deniability if something goes wrong. As far as Hummer goes, every single day, Xinhua has sown FUD (fear, uncertainty, doubt) about the marriage. Today's Hummer deathwatch, Xinhua style, opens as follows: "General Motor's Hummer is considered as an exaggerated and extreme example of a disregard for the environment and there are significant brand negatives for the Chinese company Tengzhong to buy it." Make the jump for more death sentences ....

Editorial: GM China: “We Can’t Be Listed in the Filing.” Yes, You Can

Bertel Schmitt — Tue, 02 Jun 2009 09:28:04 +0000

Government Motors is launching a barrage of press releases in an attempt to shock and awe all naysayers. All is fine with its Asian operations, they are insulated from the bankruptcy of the mother ship, it's great business as usual. As far as China (GM's second largest market behind the United States) is concerned, business never has been better! It seems everybody is counting on the Chinese consumer to bail out the US government's bailout. Bankruptcy filing in New York? Never heard of it. It ain't us. There's no such thing. Suan Le Ba! Fuhgedaboutit.

Editorial: Treasury Secretary Tim Geithner in China for GM’s C11

Bertel Schmitt — Mon, 01 Jun 2009 10:10:39 +0000

US SecTreas Timothy Geithner quickly got out of DC for the Monday curtain call of the artist now known as Government Motors. Geithner went as far as Beijing to distance himself from the performance. Keeping a distance didn't mean keeping his mouth shut. From Chrysler and GM, "we want a quick, clean exit as soon as conditions permit," Geithner told students at Peking University in Beijing. Reuters took notes. "We're very optimistic these firms will emerge from restructuring without further government assistance." Strangely, everybody shares his optimism . . .

Editorial: Volt Syndrome Strikes In China

Edward Niedermeyer — Mon, 20 Apr 2009 17:23:13 +0000

A few weeks of vacation from the blogosphere's non-stop news cycle can leave a blogger feeling a bit behind the times. Two weeks is an eternity in internet time, but stepping away from the barrage of news, spin, hype and hysteria is good for the sense of perspective. Especially if the down time is spent exploring countries on the local typical family vehicle, complete with two wheels, four speeds and about 100ccs of thundering power. Beyond the sheer novelty of seeing entire families commuting on a moped ("Daddy, Nguyen isn't staying on his side of the pillion seat"), travel in the developing world shows how insulated America is from the transportation realities of the rest of the world. If the $1,000 entry to the world of moped ownership is a major (if attainable) hurdle for workaday Vietnamese, even sub-$10k vehicles face what a GM sales release might call "a challenging sales environment." Try to explain the "green premium" for hybrids and plug-in vehicles to an auto-aspirational third-worlder, and watch as the idea of paying more for less room and power draws only puzzled bemusement. Hair shirts, it appears, are strictly a fad for the western and wealthy. Case in point: the world's first plug-in hybrid, the Chinese BYD F3DM.

Editorial: GM Shrivels, Chery Blossoms, Detroit’s Brands Shipped Off To China

Bertel Schmitt — Fri, 13 Feb 2009 14:35:37 +0000

Yesterday, we related a Reuters report that SAIC might buy out the Chinese part of GM, that GM might take the money and bail. Today, true to form, the denials arrived. Again according to Reuters, GM says they have no plan to sell shares in its joint venture SAIC. This according to Henry Wong, a spokesman for General Motors China. Reuters is positive that GM held talks with SAIC Motor about selling part of its 50 percent stake in the joint venture, or other assets. As if on cue, GM's plan to enter a joint venture with SAIC's competitor FAW received new traction today. The plan had been on hold for a while.

In the meantime, the speed dating game between Chinese companies and desperate Detroit companies who want to swap their corporate children for cash continues. Today on the radar screen, again: Volvo. Reuters has picked up indications that Chinese car maker Chery Automobile has held talks with several European auto brands, including Ford's Volvo, and is interested in an acquisition. Volvo and GM are not alone.Whole China is turning into a speed dating frenzy, anything goes, and the dates are getting cheaper by the minute.

Unsafe At Any Sense: Ralph Nader Punks Chinese Auto Parts Makers

Bertel Schmitt — Sun, 21 Dec 2008 15:09:19 +0000

Failed four time presidential candidate and god of all ambulance chasers Ralph Nader has found a new enemy: China. The Center for Auto Safety, founded by Ralph Nader with part of the $425K court settlement paid by GM in 1970 for invasion of his privacy, has been researching recalls of Chinese auto parts. Those recalls are now posted on the safety center's website. The New York Times took the bait, and ran a long story under the headline "Recalls of Chinese Auto Parts Are a Mounting Concern." If the NYT would have just taken 20 minutes of research, they would have found that they've been snowed.

China Buyout Watch: Geely’s Turn For Volvo?

Bertel Schmitt — Wed, 17 Dec 2008 11:34:36 +0000

Volvo is Latin for “I turn” (as in “revolving credit” of lore, or as in “revolver” for people who can’t get one.) Nomen est omen: Never has the word been truer than now, as the formerly glorious Swedish brand is being offered-up for a gang-bang. From day one, TTAC chronicled the trials and tribulations of the [...]

Editorial: China Could Buy 433 General Motors With Their T Bills Alone

Bertel Schmitt — Thu, 20 Nov 2008 17:52:17 +0000

We made a huge mistake with our "SAIC may buy GM" story. We paid for our sins. The story created so much traffic that it literally melted two servers. TTAC's China Syndrome. As you are painfully aware, TTAC was out of commission several times yesterday. A day after the story broke, the story broke our servers. Hit counters for all stories are currently SNAFU; they just gave up and went home. A huge amount of traffic keeps pouring in from China. And no wonder: a Chinese search for the same story produces 76,500 hits. If we'd run this story a few months ago, a wagon would have pulled up outside of TTAC World Headquarters, and they would have taken us away in straitjackets and a Thorazine drip in our veins. Now, a lot of people think GM is crazy for not doing the deal. A Connecticut hedge fund manger, who we reached for comment, looked at the screen, said "Ugh, the market is ugly." When prodded to focus on GM and SAIC, he said: "If I'd be GM, I'd be in Shanghai right now, negotiating the deal. Then I would go to Congress and say: What are you going to do about it?"

Editorial: Bloom Off The Rose For Chinese Car Industry

Bertel Schmitt — Sun, 16 Nov 2008 12:04:45 +0000

Time for the United Auto Workers (UAW) to collect second-hand songbooks and ship ‘em over to their comrades-- make that "union brothers" in China. Chinese taking our jobs? Wake up guys! Solidarity forever! The Chinese worker is taking it on the chin just like the working stiff in God's Own Country. And let's ignore the fact for a while that FICA, SECA, COBRA, and VEBA are not part of the Chinese language. PSA Peugeot Citroën, an affiliate of Dongfeng Motor in China, has "decided not to renew the contracts" (translation: has fired) 1000 workers on their Wuhan site, Gasgoo reports. Volkswagen, which depends on China for 15 percent of its worldwide auto sales, gave the Chinese equivalent of pink slips to 700 people at their Changchun factory. According to Chinese media reports, Ford, BMW, Chery, and untold more are busy. Busy thinning out their working masses, that is. Where did all the thousand flowers go?

The Chinese Are Coming!

Andrew Dederer — Tue, 26 Feb 2008 12:11:13 +0000

Or not. Despite all the noise about a Chrysler - Chery hook-up, despite Chinese manufacturers' presence at the North American International Auto Show, we have yet to see a single Chinese-built (let alone designed) vehicle here in the U.S. So, are they really coming? The short answer is yes, some of them, eventually. But not for quite a while yet.

Chinese Automakers Set to Pump and Dump Western Partners

Frank Williams — Thu, 03 Jan 2008 10:34:00 +0000

I once worked for a colonel who'd address all obstacles by saying "you can solve any problem if you throw enough money at it." While our budget officer would have to breathe into a paper bag for a half hour afterwards, the colonel always managed to squeeze whatever was needed to resolve the crisis du jour from the budget-- and solve the problem. Automakers native to the People's Republic of China (PRC) must have bugged his office; they've adopted the exact same philosophy.

China to Foreign Automakers: Drop Dead

Frank Williams — Thu, 16 Aug 2007 10:39:11 +0000

By law, foreign automakers seeking a foothold in China must form joint ventures (JVs) with domestic "partners." As we've outlined before, there's an immediate downside: China's scant regard for intellectual property rights (IPR). For example, GM found itself suing Chinese automaker Chery (whose name middle-finger salutes Chevy) over the QQ, a blatant copy of the Daewoo Matiz. The case was settled out of court, but the issue of IPR remains unresolved. Now that Chinese automakers are consolidating and striking out on their own, what's going to happen to their foreign partners and their IPR? What do you think?

The Chinese Automotive Market: A Primer

Frank Williams — Mon, 06 Nov 2006 11:36:13 +0000

The Chinese automotive market has over a billion potential customers. Sales growth is well into the double digits. Labor rates are a fraction of those paid in western countries, without any union rules to slow down investment or add legacy costs. An ideal place for American investment? Depends on how you look at it. The [...]