QOTD: When Will All of Our Cars Be Chinese?

Mark Stevenson
by Mark Stevenson
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qotd when will all of our cars be chinese

When Henry Ford began selling his popular Model T around the world, the company bearing his name didn’t assemble all of them in America. Instead, the Model T was the first truly global car, assembled in Commonwealth nations such as England, Canada, Australia, and others like Argentina, Belgium, Brazil, Denmark, France, Germany, Mexico, Norway, Spain — hell, even Japan.

But that was a different time. Regardless of which country someone lived in, Ford factory workers made roughly the same amount of money working on the assembly line.

Now things are different.

There’s a recent-ish episode of the Freakonomics podcast — titled “ Did China Eat America’s Jobs?” — that does a great job of explaining how we got in our current lopsided trade pickle with China. (Listen to it.)

In it, host Stephen J. Dubner interviews fellow economist David Autor, who gives us a bit of a history lesson:

There are two big differences of the last two decades relative to earlier periods. One is that a lot of our trade prior to China’s rise, a lot of it was North-North trade. You know, trading between wealthy nations. So you know, we sell aircraft engines to France and we buy cheese and wine and Renaults or maybe we buy Mercedes from Germany. And so it’s a lot of high-skill people trading high-skill goods and we’re trading on the basis of taste. Like, “I like your vehicles. You like my aircraft.”

But, with China…

A lot of what we’re trading there is labor-intensive goods. Nothing that China was selling the United States, especially up until recently, couldn’t be made in the U.S. It just couldn’t be made as cheaply. So this was actually about price competition rather than simply having a better or different variety.

I want you to let that sink in for a moment: nothing in China, at least 10 years ago, couldn’t be made in America; it just couldn’t be made here as cheaply as it was made there.

Up until recently, this has been okay — for the most part. China has focused on making low-value goods: light bulbs, small appliances, cheap home accoutrements, and other baubles and tchotchkes.

But now — now China is building cars, and it’s building them for us.

An automobile isn’t a small, cheap consumer good. Instead, for virtually every single one of us, a car will be either the first or second most expensive thing we ever buy after a house. The automotive industry provides thousands of jobs at each plant and further thousands of spin-off jobs in regions around those plants. Those jobs are filled by people who spend money on things you make, create, grow, and sell.

Unfortunately, there doesn’t seem to be an end to this outsourcing of America (and Canada, for that matter). Ford says it’s sending Focus production to China because we don’t buy small cars anymore. Besides, margins on that car are way too thin; our labor costs are way too high.

But what about Buick and the Envision, a near-luxury crossover that sells for $35,000? Or the Volvo S90 large luxury sedan, which sells for near-as-makes-no-difference $50,000?

When will all of our cars — all of them — come from China?

And considering we can make all these cars here, in North America, I wonder — what would Henry Ford think of that?

Mark Stevenson
Mark Stevenson

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  • Big Al from Oz Big Al from Oz on Jan 12, 2018

    The title for this article was designed to pull at the emotions of the readers. Mark as knowledgeable as he is in auto industry news knows this. The only area I envisage Chinese auto dominance is with EVs in advanced evonomies. Even then there will be steep competition. China and in the future with India will dominate developing nations in the auto market. The Chinese will target more prosperous developing nations and India will scrape the bottom of the barrel.

  • Sub-600 Sub-600 on Jan 12, 2018

    Judging from the emotional responses, one might assume the article was titled “When Will All of Our Cars Be Australian?”.

    • Big Al from Oz Big Al from Oz on Jan 12, 2018

      Sub-600, Good retort. Judging by the timing of your comment and I'm not familiar with your name and the abstract nature of your comment, you want a bite. So what is it you are after? Hmmm?

  • JLGOLDEN It's really cute, and I'm sure the EV driving experience is a delight for those who give it a whirl. I hope this is enough to keep FIAT on the North American map! But, I fear dealers won't move enough units to justify investments in FIAT parts/service training for the long haul.
  • JLGOLDEN After most of these cars left their duty in rental fleets, they went on to lives with multiple changes of ownership and visits down the auction lane. Can Ford find the current owners and get these things repaired?
  • Abraham I rented a Kona EV - or tried to. I got in, turned it on and the battery had not been charged, displaying only about 25% state of charge and remaining range of 72 miles. It was driving ran outside and I was deciding if I wanted to keep it and find a charger or give up and get a regular vehicle. After about 3 minutes the displayed range dropped to 67 miles, then two minutes later dropped again to 64 miles, all without moving an inch with nothing turned on except the ignition. So the true remaining range was a complete crap shoot. I gave up and got a crappy Buick Encore with “unlimited” range instead.
  • Analoggrotto Committed? That would be your typical NA Miata driver with 10 degrees of negative camber dragging their body work on their rims with over stretched tires. I'm guessing that I described 80% of your friends right there.
  • Theflyersfan And in other breaking news, the sun rose in the east, water is wet, and there are a few people here who need committed as soon as possible. Of course they fall short! Automakers are going to publish the rosiest numbers possible with a big old "*" next to them to CYA. It's the same thing with ICEs. The worst offenders are the 2.0L turbos in 5,000 lb CUVs. The numbers look all fine in the EPA tests, but in the real world, loaded with people and stuff, with weather and hills, and driving like you're late for practice, and keeping the mouse-motor in constant boost, that 28 mpg in mixed driving becomes 18. EVs are no different. I guess CR and everyone who reported it needed clicks today.