Thursday, December 12, 2024
PMT: China's cars are taking over world markets
I was absolutely floored when I saw this chart and the accompanying article in the New York Times.
After all, I grew up in the Detroit area among Ford, Chrysler and GM executives and engineers who were routinely cycling through assignments in Europe, Asia and Australia, reflecting the American manufacturers' role in the world auto economy, established in the days of Henry Ford. In my mind, we were still there. We aren't.
The truth is that Chinese companies increasingly control world markets where we don't even try anymore. In part, that is because American companies decided to focus on high-profit SUVs and trucks rather than smaller more affordable vehicles, and that precludes selling much to the developing world-- or even to Europe.
I'm baffled by the American strategy of building electric cars... but only huge, expensive ones. Why did they thing that what the world (or at least part of North America) needed was an electric Hummer? People who can afford and desire a tank-like $106,000 vehicle can probably pay for gas, and usually don't care so much about the environment. In October, 2024, the average price for an electric car in the US was over $56,000, which is shocking.
The car companies obviously decided that just selling vehicles with big profit margins is what they want to do (except for Chrysler, which has decided to sell almost no vehicles at all). That might be good for them in the short term, but it is terrible for consumers, and I wonder why their interests don't seem to matter when government subsidies are being handed out. In truth, if Chinese cars enter the American market, even with tariffs, the whole game may be over for US makers.
