By on September 5, 2010

It used to be that joint ventures with Chinese manufacturers were strictly for Chinese consumption. The Chinese would like nothing more than to expand to other markets with their foreign branded products. Strict joint venture contracts typically forbid just that. Sure, sometimes there are some small scale exportation tests. But usually, what is made in China, stays in China. Contracts can be changed or amended. More and more Chinese automakers seek to expand their relationship with joint venturers beyond China’s borders.

The move was started by GM that allowed China’s SAIC to ride into India on GM’s coat tails.

Now Ford’s Chinese partner Changan wants to do something similar. When Reuters asked whether Changan is planning to go to other markets with Ford, Zhang Baolin, president of Chongqing Changan said: “We are having discussions with each other on that. We are doing some studies currently.” Changan is strong in China’s mini vehicle segment, where Ford is weak. These cars are essential in opening emerging markets.

Other foreign automakers, including PSA, are also looking to expand their ties with their Chinese partners beyond China. PSA is thinking of exporting cars made at its manufacturing venture with Dongfeng to the rest of Asia and possibly Russia as early as next year, its Asia chief Gregoire Olivier said.

This might be the answer to China’s car export troubles: Export cars that don’t look like they have been made in China.

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28 Comments on “Your Next Ford Could Be Made in China...”

  • avatar

    It would made sense from a cost base point of view. The only issue is managing the Joint-Venture with the local partner correctly. I was “exposed” to Chinese manufactured cars bearing the logo of a major European manufacturer and the quality was unfortunately, sub-par. In time, I am sure that the Chinese willl get it right and that Chinese manufacturer will become a major export hub.

  • avatar

    A recently introduced light airplane Cessna 162 is completely made in China. By all accounts, the quality is excellent. Sounds like a win, if you can find a Chinese partner who can deliver.

    • 0 avatar

      I dunno, Pete… Remember the outcry when Cessna made the China announcement in 2007, at the height of the melanine scare? Deposit holders were steamed, to say the least. The number of depositers who withdrew their orders varies, depending on whether you’re talking to owners or the company itself… but anywhere from a few dozen to well over 100 swore they didn’t want a “Chessna,” and spoke with their wallets. That’s as much as 10-15 percent of the order book.

      Granted, with the SkyCatcher we’re talking about something that affects a minuscule subsegment of an already tiny segment of the population. So imagine, then, the response from the mass market if a “Detroit Three” automaker announced it would import Chinese-made cars to the US.

      It’s one thing to own China-made clothes or electronics… or even to have a handful of “crazy” pilots flying overheard in Chinese-assembled planes. It’s quite another to imagine China-made automobiles driving down our highways, or by our schools. Perception is everything, and China will continue to lose that battle for some time.

      On that note, it bears reporting that Cessna just announced a significant delay in SkyCatcher deliveries, ostensibly tied to difficulties with getting Shenyang to incorporate the design changes necessary following the preproduction aircraft’s second spin-related crash. So far, Yingling (an American business based in Wichita) has had to make those changes at time of reassembly; that’s why there are only 8 C162s in the field so far.

  • avatar
    Uncle Mellow

    I think hell will probably have frozen-over before I buy a car made in China. (It will definitely have frozen-over before I buy a car with a blue oval on the bonnet.)

    • 0 avatar

      Get your coat soon. I bet your Japanese/European snobmobile has a lot of Chinese parts in it.

    • 0 avatar

      You will be piecing cars together out of scrapyards within a decade, I believe.  Stingray is right, most cars are collections of Chinese parts assembled for marketing reasons in their “home” countries.
      That sleight of hand will soon pass, except for tall vans and large pickups that take up too much cube to import fully assembled.

  • avatar

    Look at the warranty/guaranty of many products made in China. You have to mail the product to a location typically located on the west USA coast or, at times, the USA east coast. And pay the shipping both ways.
    My bowels tremble with rage at the displayed audacity when that shipping costs meets or exceeds the amount paid for the item.
    And even if there is a difference between the item’s initial cost and the cost of attaining repairs OR for the manufacturer and/or seller to decide if they will replace vice repair the cost in shipping, packaging and time does not make sense when thinking in a cost/return mode.
    So often it makes economic sense to toss aside the defective product and buy a new one. For me, typically, from a hopefully different manufacturer that perhaps makes a more reliable product.
    Not everybody buys on price alone.  Surely there are at least a few folks that would gladly pay more for a more durable product!!!!!!!!
    Men’s shirts, pants, etc. I am so fed up with cheap zippers!!!!!!!!  I WILL pay more for a zipper of higher quality that outlasts the el cheapo crappo zippers that likely save the manufacturer a few mere pennies less than a quality long-lasting zipper!!!!!!!!!
    Build it and they will come. But IF you build it inform the Herd your zipper is higher quality and intended to outlast the crappy zippers.
    Charge more!!!!!! Go for it. Also use a higher quality thread that doesn’t dissolve in water!!!!!  Charge more for your product with higher quality components!!!!!!  Brag about it and explain your higher asking price is backed not by some sport or entertainment figure’s name but by higher quality components!!!!!!!!!!!
    Okay, griping set aside……….
    China-made Fords.
    So, the conveyance needs warranty work. How do I ship it back to the official warranty repair center? Do I have to drive to the pier and wave good-bye as the crane hoists it aboard the China-bound ship?
    Will that work be outsourced to various venues; perhaps Greasy Petes’ auto repair with its two-bay grease trap facility on Railroad Avenue next door to the abandoned factory where the winos congregate?
    If the present Ford dealership network is utilized what if warranty or non-warranty work requires the inevitable not-in-stock part that has yet to be manufactured and with none in the supply line and the sub-contractor in China is currently assembling a few hundred-thousand Presto deep fry cookers and a commitment to a Wal-Mart’s worth number of Sunbeam piece–crap toasters following before returning the factory’s output to that pesky Ford contract and the slow wending of the completed component via water buffalo-pulled cart across often washed-out typhoon-ravaged roads, across the mighty Yangtze down to the seaport and placed upon the freighter waiting for a full load from numerous various factories to plod across the Pacific Ocean until Long Beach is reached and the containers unloaded and sorted and the trek to the proper local warehouse is made and after arrival and the illegals hiding within are scattered and the contents sorted and UPS called to grab YOUR component and sent to Greasy Petes’ or wherever for final assembly upon YOUR conveyance but…… whoops.
    Wrong part!!!!!!!!  Wrong part ordered or shipped?  Misdiagnosis? Dag nab it!!!!! I thought that zero was an “O”!!!!!  “Oh, sorry, my “Zs” always did look like “2s.”
    Or, the new component is also defective!!!!!!!!!
    “Buy a Ford and be adored!!!!!”

    • 0 avatar

      It’s funny you mention zippers, I and my friend have pants (jeans and slacks) that we bought at walmart over the past several years and they all have broken belt loops.

    • 0 avatar

      Alas, the trend to low price and low quality is by no means limited to Chinese products, let alone Chinese companies.  It’s often difficult finding high-quality products (of many types), even if you are willing to pay more for the quality.
      On the other hand, Chinese does not necessarily mean low quality or poor service.  Lenovo’s ThinkPad line is an excellent example.  Long built in China, it has been part of a Chinese company for five years now.  Quality is still very good (yes, there are arguments about which vintage is even better) and I can get quick and knowledgeable service from a local authorized repair facility.
      But stereotyping is so much easier …

    • 0 avatar
      John Horner

      “Look at the warranty/guaranty of many products made in China.”
      That generally isn’t an issue on major brand products which happen to be made in China these days. I own quite a few DeWalt, Milwaukee, Makita and other power tools. The majority of them are made in China these days, but service and support is still through a national network of service depots and authorized repair shops.

  • avatar

    Don’t worry, America’s dependence on China won’t last.
    As oil becomes more and more scarce, it will be more and more expensive to ship finished products from China and Asia in general. At some point mass commercial shipping will become prohibitively expensive and air cargo transportation will be nigh on impossible.
    I guess we will all be back to what it was like at the beginning of the 20th century if not earlier.
    My guess is it will happen within the next 10 to 20 years. Not long to wait.

  • avatar

    Multi-national companies think globally and have no sense of patriotism except where the accounting will be repatriated.   So currency valuations and trade policies will be the deciding factor, not whether they can export a vehicle that can be accepted by the receiving public of another country.       

  • avatar

    Sea shipping is cheap and uses hardly any fuel so i don’t see why it would die out. But i see smaller, not railroad or waterway connected cities die out.

    • 0 avatar

      I don’t think you are right there, if the internet is to be believed:

      Even the most efficient cargo ship diesel which is the Wartsila-Sulzer RTA96-C turbocharged 14 cylinder two-stroke diesel engine consumes 1,660 gallons of heavy fuel oil per hour. I think that’s a lot.
      Whilst comparable cruise ships also consume a lot of fuel — the fleet of U.S. flagged ships sailing interisland Hawaiian cruises (spending 96 hours of the week idle in port) run a price tag of nearly $250,000 a week to fuel each vessel, lifeboats and tender boats.

      This would indicate that shipping does consume a lot of oil.

    • 0 avatar

      The amount of cargo that a large container ship can carry makes the large fuel use economical for the time being.
      When and if oil eventually becomes prohibitively expensive, there is no reason why cargo vessels can’t be fitted with nuclear propulsion.  The US already fields 10 Nimitz class nuclear reactor propelled aircraft carriers, plus the Enterprise, and more scheduled to be built.  Nuclear powered civilian ships have been built in the past, but due to the low prices of oil, were not deemed economically viable.  Russia currently has a nuclear powered icebreaker ship in use.

    • 0 avatar

      When you figure that the Emma Maersk (which uses the Wartsila engine you refer to) has a cargo capacity of roughly 150,000,000 kg, it doesn’t seem so bad.  That’s equivalent to the payload of some 75,000 Ford F-350 heavy-duty trucks.
      3.8L/s for the Wartsila engine, or 13,700 L/h.  At 50 km/h speed, that’s about 27,500 L/100 km.  When you scale that back to the Ford F-350 load size, each F-350 payload uses about 0.37 L/100 km.  That’s 1/10th of the smallest passenger cars, and 1/40th of what the F-350 uses.
      Sea shipping really does not use very much fuel.

    • 0 avatar

      Cargo vessels can easily burn coal if worst comes to worst, and there is way more coal than oil.

    • 0 avatar

      yes I agree that sea shipping is still economically feasible and will probably be for some time (like I said 10 to 20 years) and there are other options — nuclear, coal (and of course wind power in the final analysis — nobody will take that away)… but it’s still 3 – 5 million liters of fuel oil burned every voyage… and when you factor in that the above figures given for the Wartsila apply when it’s running in the most efficient mode… but in real life there’s wind, there are waives, there are barnacles on the hull… when you take that into account you’ll see that the margin will be somewhat eroded

  • avatar
    Telegraph Road

    From the Reuter’s article: “When asked whether Changan — a front runner in China’s mini vehicle segment — is planning to team up with Ford to tap overseas markets, Zhang Baolin, president of Chongqing Changan said: “We are having discussions with each other on that. We are doing some studies currently.”

    Does “overseas” = “USA”?  Did you confirm with Ford?

    TTAC should be more NY Times and less Huffington Post.

    • 0 avatar

      Overseas means overseas, and no one is confirming anything.  From Reuters:

      Joe Hinrichs, head of Ford Motor’s operations in Asia and Africa, told Reuters in April the Detroit automaker was looking at a lot of future opportunities with Chongqing Changan. 
      But he declined to say whether Ford was seeking to take Chongqing Changan’s commercial vehicles outside China, a move that would parallel rival GM’s earlier initiative.

  • avatar

    With all the extra capacity being reported in China, I could see this coming in a big way, and it will in NO way be limited to Ford.

  • avatar

    Obviously China has become the new boogeyman. Germany was going to kill us. Then Japan. Korea. Now China.

    Wake me when it’s somewhere interesting like Erietria or the Republic of Upper Volta. That might make for some excitement.

    • 0 avatar

      Don’t you just Love the yellow peril bullshit?

      I don’t think Upper Volta is going to be a threat anytime soon, seeing as it has not existed since 1975.

    • 0 avatar

      I can never remember Burkina Faso.

    • 0 avatar

      @ Dimwit and FJ20ET

      My name for these people is Sinophobes – everything bad is blamed on China. It used to be Germany, then it was Japan, now it’s China.

      Of course it’s okay for 250 million cars to be on the road in the United States, consuming precious oil resources, but God forbid that China should be allowed the same privelege. And of course it’s the billion or so individual Chinese citizens themselves who forced North American and Western European corporations to outsource manufacturing and service industries to the Midedle Kingdom.

      I use this same tool when I’m training dogs. It’s called attention diversion – you focus the dog on something else to divert their attention from the bad behaviour they’re exhibiting. In the same way citizens are being focused towards the “boogeyman” of the moment – Saddam Hussein, or “Weapons of Mass Destruction”, or Manuel Noriega; whatever diverts our attention from the real problem, the destruction of the middle-class.

      Eventually the Chinese will be supplanted by the next “Boogeyman”, maybe India, or Malaysia, or perhaps the next Columbian drug cartel to capture our short attention spans.

  • avatar

    China’s quality is as good as a manufacturer is willing to pay.  The above comment about power tools is true.  A Chinese made DeWalt is pretty much the same as the ones made elsewhere.  The tool’s quality has slipped IMHO but I don’t blame China for that.  The manufacturer made a decision based on cost/quality compromise and that is that.  But what kills me is when a company ships American work overseas in an obvious move to cut costs yet the price we pay remains the same.  Levi jeans are a good example.  No longer made in USA they charge just as much.  The only reason I bought them was because they were made here.  Now, I buy the Modell’s cheapies.  If they are going to be made abroad, I might as well be the one to save some money.  There is nothing wrong with imported goods when you want something unique from a given country, but to import the bread and butter components of day to day life means that people that should be working here are not.  You can wax on all day about the global economy but the fact is that not everybody can work in the service sector, not everybody can retrain at age 50. and not everybody is suitable for college.  A country’s economy needs to be able to employ as many people as possible.  Just think of all those IT people who felt secure as being part of today’s high tech economy…IT jobs have dried up like water in a desert as companies outsource their computer needs…

  • avatar

    The drop in US quality correlates with Mr. Bush’s presidency.
    When the “Republican” party made it clear that there would be no prosecution for any business activity, it unleashed a flood of fraud in the marketplace.  China shipping junk would not be prosecuted.  Pollution regulations not honored, SEC investigations stalled.
    I have never seen the levels of fraud in the business community as I saw under Mr. Bush.
    This has a negative effect on all business, as businesses run for fraud, crowds out honest businessmen.

    • 0 avatar

      If you aren’t being sarcastic, please recall actual history.  Enron was running wild under Clinton and collapsed under Bush.  Now, it wasn’t Bush that cracked it or anything, but it was a pretty big scandal that happened with the tech bubble.
      Madoff was under suspicion since 1999, but no one could crack it open until Madoff admitted the scheme to his two sons.
      But obviously it is Bush’s fault.  By no means was he a great president, but he isn’t as bad as many would have you believe either.

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