The issue of China’s totalitarian government intimidating American businesses into silence over protests in Hong Kong and human rights violations in China has come to the fore, with three nearly simultaneous incidents. The National Basketball Association didn’t quite censure the Houston Rockets’ general manager Daryl Morey for tweeting “fight for Freedom” and “stand with Hong Kong,” but league commissioner Adam Silver’s attempts to mollify Xi JinPing’s regime, to preserve the NBA’s profitable ventures in China, have been described as craven. E-gaming company Blizzard Activision, which is 4.9-percent owned by the Chinese Tencent company, stripped a tournament champion of his title and winnings and banned him for a year for expressing support for Hong Kong in a post-event broadcast. When the animated South Park comedy show satirized censorship in China, the Chinese government simply erased South Park from the Chinese internet as though it never existed. On that side of the great firewall of China, South Park has become like Nikolai Yezhov.

To their everlasting credit, Matt Stone and Trey Parker, South Park’s creators, unlike the NBA and Blizzard Activision, didn’t kowtow, instead releasing an “apology” that mocked both Chinese government censors and the NBA.

It’s abundantly clear that China will use the threat of punishing American companies by restricting access to the Chinese market in order to exert intimidating influence here in the United States.

What does that have to do with cars? Read More >

While you’ve heard the media prophesying a global recession for months now, one that will effectively obliterate the younger generation’s purchasing power for the rest of their lives (or so they say), the United States is actually in relatively good shape vs other markets. The People’s Republic of China already appears to be in a recession, and it’s no state secret that its automotive market is hurting.

Part of that is due to the ongoing Sino-American trade war, but there are other factors at play. We’ve previously covered how China’s overzealous adoption of increasingly rigid efficiency mandates upset auto sales. As it turned out, the nation’s commitment to zero-emission vehicles and swelling emission rules scared off a subset of buyers. Others simply couldn’t rationalize making such a large purchase during a period of economic uncertainty.

This all resulted in China’s automotive market experiencing more than a full year of consistently negative growth — something the PRC would like to see fixed posthaste. On Tuesday, the Chinese State Council announced a tentative plan to fix its struggling economy.  Read More >

Automotive retail sales in China rose slightly last month, representing the first uptick in volume over the last year, according to Bloomberg. But those gains were the result of a nationwide fire sale of backed-up inventory that dealers were tired of seeing clutter up their lots. Officially, the China Association of Automobile Manufacturers (CAAM) says the new vehicle market still kind of sucks.

For June, wholesale deliveries of new passenger vehicles fell 7.8 percent to 1.73 million units. That’s twelve straight months of negative growth.  Read More >

China is currently the largest proponent of electric vehicles on the entire planet. The nation has even incorporated BEVs as a significant part of its complex strategy to overtake the United States the dominant global superpower. However a sudden influx of battery related fires has caused it some trepidation, even though there hasn’t been much evidence to suggest they are actually more prone to catching fire than gas-powered vehicles.

Regardless, the People’s Republic is now demanding that manufacturers conduct routine inspections on electric cars. China’s Ministry of Industry and Information Technology says all companies must conduct checks on BEVs, focusing on battery waterproofing, battery boxes, charging points, high-voltage wiring harnesses, and even the wear of mechanical components. They will also be required to report on repairs and any incidents that might indicate a problem. According to the ministry’s press release, they have until October to submit their findings.  Read More >

China might not be the kind of market everyone thought it was — one without a ceiling, boasting unlimited potential for growth. One by one, automakers find themselves having to confront economic reality.

Despite amassing a network of factories that could theoretically outproduce the rest of the world, the Asian country’s automotive sector only operates at about half its total capacity. That’s disconcerting. Even Europe, site of some serious industrial headwinds of its own, manages to operate around 70 percent capacity.

While the reasons for China’s woes are ludicrously complicated, one of the most pressing issues is that its economy is slowing much earlier than anticipated. Automakers, both foreign and domestic, almost universally believed that The People’s Republic would surpass the United States as the world’s largest automotive market — and they were right. But investments kept pouring in, factories were built, and the market started to cool prematurely. The situation only grew worse as incentives dried up and people began buying fewer cars; now, 2019 is shaping up to be a very bad year for the nation’s automotive sector.  Read More >

Despite spending a fortune supporting burgeoning automotive manufacturers and opening its door to foreign enterprises, China’s state planner has approved strict new regulations on investments within the industry.

Following a handful of draft proposals earlier this year, China’s National Development and Reform Commission (NDRC) announced it will ban new independent businesses that make only traditional combustion engines while continuing to push for more “new energy” vehicles.

The People’s Republic has what some might call a bit of a pollution problem. But it’s also one of the largest and fastest-growing battery producers in the world; state policy aims for the widespread adoption of electric vehicles. Unfortunately, this left China with hundreds of automotive startups that will never become profitable just as the country enters an economic downturn and its first year of negative car-sale growth in decades. Read More >

China has bit of a gambling problem when it comes to electric car manufacturers, though it should probably be referred to as a “gambling solution.”

The country dumps vast sums of money into hundreds of EV startups, effectively hedging its bets by placing chips on absolutely everyone. With $15 billion already invested, the nation intends to put another $47 billion toward the cause — plus whatever funding investment firms decide to contribute. While the strategy has definitely stimulated the economy, created jobs, and supersized the industry, there’s growing concern that creating a battle royale between startups could blow up in China’s face.

Even if it doesn’t, there’ll still be a bunch of automakers eating each other until only a handful remain. Previous estimates had that number riding around 5 percent of the whole. But NIO Capital, the Chinese investment firm that’s already invested a gratuitous amount of funds into advanced automotive tech, claims the actual number will be far lower — probably around 1 percent.  Read More >

China has announced plans to slash import fees on automobiles to 15 percent starting this July. While the tariff currently rides high at 25 percent, the country’s Ministry of Finance said reducing it was part of an intentional effort to open up China’s markets and spur development within the local automotive sector.

It may also have been part of a peace offering. President Donald Trump has been pretty clear on China’s trade policies with the United States, frequently referring to them as unfair. The U.S. imposes a svelte 2.5 percent fee on imported vehicles — unless we’re talking about trucks. “Does that sound like free or fair trade?” Trump tweeted last month. “No, it sounds like STUPID TRADE — going on for years!” Read More >

Thanks to an interested and better-financed populace, luxury purchases have been on the rise in China for the past decade. Chinese consumers currently drop around $7.6 billion per year on premium goods, accounting for almost a third of the global luxury market. This has resulted in a massive influx of high-end items and brands that want to capture the public’s attention and, more importantly, cash.

This includes automotive brands — all of which are desperate to expand into the Chinese market. But finding the correct approach is tricky. Plenty of fashionable brands attempted to incorporate authentic Chinese elements into their designs, but failed to do so in an elegant or convincing way. There’s a bit of a balancing act required. Market research shows younger consumers like clean designs and a little bit of bling, but don’t want these established brands catering too much to Chinese tastes. Older consumers, however, are willing to enjoy a little bit more ostentatiousness and adherence to tradition.

That’s one reason why you see so many new cars showing up at auto shows painted red. In China, red represents good fortune and crops up on significant items on important dates all the time. Wedding dresses are traditionally red, as are envelopes containing monetary gifts to commemorate the birth of a child or the new year.

However, we have to wonder if some brands aren’t going a little overboard. Mercedes-Maybach, which just released a hideous concept SUV intended to whet Chinese appetites, has followed up that eyebrow-raising effort with “the pinnacle of luxury living.” Read More >

“Paramount Leader” and Chinese President Xi Jinping clearly hopes to defuse China’s trade situation with the United States after Donald Trump launched an aggressive tariff hike on metals last month. The People’s Republic has already filed a complaint with the World Trade Organization alleging Trump’s decision to impose additional duties of 25 percent on steel and 10 percent aluminum violate international trade rules.

It’s also requesting 60 days of consultations with the United States to resolve the dispute.

There’s also an olive branch on the table. Xi has promised to cut auto import taxes and improve intellectual property protections in a bid to bolster foreign exports and ease tensions before the U.S. and China enter into a full-blown trade war. Meanwhile, the White House is threatening to increase duties on $50 billion worth of Chinese goods in response to claims that China essentially bullies foreign companies to hand over technology in order to sell it inside the country.  Read More >

Chinese car brand Guangzhou Automobile Group’s showing at the North American International Auto Show made it pretty clear that the manufacturer wants to get into the U.S. market. But, with its earlier deadlines to do so having gone unmet, there is skepticism that it won’t happen by 2019. Is it really possible?

Well, sure, anything is possible. But GAC has a laundry list of obstacles to overcome if it wants to sell cars to Americans in earnest and the clock is ticking. For starters, politicians are starting to get a little testy when it comes to Chinese trade policies, and GAC now finds itself as a focal point on the issue. More importantly, the brand needs a clear-cut path to victory — and we’ve yet to hear one.  Read More >

When we were told the electric revolution was on its way, most of us probably assumed at least some of that vehicular renaissance would take place outside of China. But Asia is where all the hot EV action lives, so that’s where the money goes.

Volkswagen, now promising one of the industry’s most ambitious pushes into electrification, plans to invest $11.8 billion through 2025 to develop and manufacture all-electric and plug-in hybrid vehicles in China, as the nation’s emission mandates become progressively more stringent. Read More >

By the slimmest of margins, Cadillac’s U.S. operations put an end to China’s repeated dominance of Cadillac’s sales charts in August 2017.

But after Americans acquired two more Cadillacs than the Chinese did in August, normal order returned in September 2017. 49 percent of the Cadillacs sold around the world last month were delivered in China, where volume rose 38 percent, year-over-year.

Perhaps of greater consequence to Cadillac’s New York HQ is the fact that September sales not only increased in China but also in the U.S., Canada, and in its rest-of-the-world markets.

September was the 16th consecutive month of global Cadillac sales improvement. Naturally much of the credit belongs to the Cadillac XT5. Read More >

Cadillac, with market-specific cars and a rapidly expanding dealer network, is increasingly a China-reliant GM luxury brand.

In four consecutive months, from April 2017 through July 2017, GM’s Cadillac division sold more new vehicles in China than in its U.S. home market. Indeed, so far this year, 48 percent of the Cadillacs sold around the world were sold in China. Thank a massive 67-percent year-over-year sales gain, stirred up by very healthy Chinese demand for the XT5.

But in August, for the first time since March, Cadillac’s U.S. dealer network reasserted its collective claim as the rightful nation for Cadillac sales success. That’s correct: Cadillac sold more vehicles in the United States in August 2017 than in China.

Albeit not many more. Read More >

The long-established U.S. auto industry is essentially impossible to turn on its head. An automaker can’t simply show up with a new brand or a new philosophy or new design tactics and instantly upset the apple cart.

Just as you can’t teach an old dog new tricks, it’s difficult to teach an old automobile market to adopt new buying habits. Market share swings are incremental. Progress is slow. At Acura, for example, facelifts of the TLX and RLX sedans and improved availability of the MDX (after moving some production to Ohio) will likely not combine to increase the brand’s market share by even one-tenth of one percent.

Given the difficulties faced by Acura in America — sales have fallen by more than a quarter since 2005 — Honda’s premium brand is turning its gaze to a larger, fresher, less established market. A market where buying habits are not cemented, where market share is still up for grabs, where market-specific vehicles are the norm.

And if Acura can soon succeed in China, where the brand has high hopes for the near-term, then Acura stands a much better chance of succeeding in America. Read More >