Why China poses a growing threat to the U.S. auto industry

MicroWave@lemmy.world to News@lemmy.world – 57 points – Why China poses a growing threat to the U.S. auto industry
cnbc.com

Chinese automakers pose a growing threat to their American counterparts — even without selling directly to consumers in the U.S. market.

Sales of China-made vehicles are rising at notable rates in Asia, Europe and other countries outside those continents. China recently reported exports of more than 5 million vehicles in 2023, topping Japan to become the top country for car exports in the world.

That volume from well-established, government-owned companies like SAIC and Dongfeng, as well as newer players like BYD, Nio and others, has catapulted China from the sixth ranking to the top seed since 2020. It comes amid declining U.S. vehicle exports as companies such as General Motors have cut international operations. U.S. auto exports in 2022, the most recent data available, were down 25% from their peak in 2016, according to the U.S. Bureau of Economic Analysis.

America — fourth globally in vehicle exports prior to 2020 — ranked sixth in the world last year, falling behind No. 5 Mexico, No. 4 South Korea and No. 3 Germany, according to global consulting firm AlixPartners.

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New headline: American automakers not making car people can afford.

Yeah maybe we want an affordable smaller electric car that’s not a 60k SUV.

And they don't need to be full of gadgets and go 0-60 in 2 seconds while wearing out the tires.

GM is the slime of the earth. I would gladly buy from anyone but them.

You need a better slime guy, mine only delivers the best earthly slime.

Not a threat, an opportunity for consumers to have more and hopefully better more affordable choices.

If there is a positive, it's the threat of additional competition.

China would have to meet all of our safety guidelines and pass testing. That is fine. A properly motivated Chinese manufacturer can produce quality products, without a doubt.

Many Chinese goods are cheap for a reason though. Much of their manufacturing is unregulated and doing unapproved design modifications to save cost is just part of doing business. Parts are recycled as new, materials are substituted, QA is reduced or non-existent, etc.

When good QA is in effect, Chinese goods are just as expensive as other brands. It costs a lot of money to make and test quality things.

I wouldn't imagine that their cars are going to be any cheaper. If they are, costs are going to be cut where you least expect and in the most annoying places. The Chinese are masters of "streamlining", so pucker up for that. If they aren't breaking a law by doing so, a part is going to be highly "optimized" for mass manufacturing. Using counterfeit parts is also a thing because product longevity doesn't matter to the consumer any more.

Really, I am not hating on them. They just have a different way of doing business. Any buyer had better know the risks and benefits of any product they choose to buy, is what I am saying. Just take a trip to Harbor Freight if you need a tool to work once. Buy a quality tool if you need it to last.

Here is an example. I bought a light dimmer off of Amazon knowing it was going to have issues, and it did. After replacing the counterfeit MOSFETs, the box, potentiometer and board was still cheaper than a domestic product. (I should add that a MOSFET is the primary thing that you are buying in a DC dimmer. It's like buying a car and immediately having to replace the engine.)

Yes Chinese goods do tend to have quality issues, but not always. Harbor Freight tools last way more than once IME. Companies like DJI make great products, probably the best on the market.

If Chinese companies can export simple reliable cheap EVs to the US I think that's a large market segment that isn't being filled.

Feels a lot like the Japanese Compact car invasion after the Oil Embargo of the 70's. They came in and wiped the floor with the lazy, large, more expensive gas guzzlers that the US automakers were cranking out. Changed the whole game..

We can agree to disagree about Harbor Freight.

However, I think you missed my point.

Is this why we can't import Chinese cars in the U.S.? They're actually affordable and desirable?

Chinese automakers are heavily subsidized by the government, so the US prevents their import to prevent them from undercutting domestic automakers. I'm sure there's a balance to this that doesn't involve a total import ban, but the US hasn't figured it out yet.

You think Europe and the US don’t heavily subsidise their auto-industries? The US literally bailed out the major auto-makers during 2008.

Like @altec@midwest.social said, Chinese subsidies for electric vehicles are helping to flood the global market. In fact, the EU has started to look into this:

The European Union is launching an investigation into subsidies that China provides to electric vehicle makers, the head of the bloc’s executive branch said Wednesday, as concern grows that the aid is harming European companies.

“Global markets are now flooded with cheaper Chinese electric cars, and their price is kept artificially low by huge state subsidies. This is distorting our market,” European Commission President Ursula von der Leyen told EU lawmakers in Strasbourg, France.

https://apnews.com/article/eu-china-electric-vehicle-subsidy-investigation-15ec926e756a36a7612a66623ccea51f

I would buy one of these cheap Chinese EVs in a heartbeat if I could.

You could not pay me to ride in a Chinese made car. Have you ever seen what happens to one in a crash test? They crumple like tin cans. If you're in an accident in one where either vehicle involved is doing more than 50 mph your odds of survival are pretty much 0. One of the few instances where being ejected from the vehicle probably increases your survival odds.

"Crumple like tin cans," as long as you're not talking about the passenger cabin, is what safe cars are supposed to do.

I haven't done a deep dive yet, but this seems to suggest that crash testing for many Chinese cars is actually pretty good.

I was in fact talking about the passenger cabin. I need to go find the video of it but there was a crash test of some Chinese made car (name was something like Cherry I think?) and pretty much the only thing not crushed flat was the engine. Drivers seat ended up wrapped around the engine block.

I don't doubt you one bit. I know that Chinese cars have had some sketchy safety issues, but it does look like they're really turning that around now on many models.

I know Chinese are really bad for safety like escalators, elevators, and automated parking for bikes cars and people getting trapped or dying in them, but cars are purposely made to crumple so the cars take all of the energy instead of the passengers. Is there a too much crumple going on in Chinese cars the issue?

Yes, the engine crumples through the passenger compartment to sit in the trunk.

Interesting. European countries are buying them, are they making them higher quality for them, because I imagine that wouldn't pass their safety standards?

Maybe. The crash test I saw was from a few years ago at this point at least so maybe the stuff they're exporting these days is better quality, but I still wouldn't trust them. Never cheap out on safety equipment, always spend the money on stuff you know is good. There are way to many examples out there of China shipping stuff that looks good initially and then after a couple years and nobody is paying attention start swapping out quality parts with substandard stuff that fails QC.

All Polestars and some electric Volvo cars are currently only made in China. Yet they are volvos in every sense of the brand. Volvo(and Lotus) is owned by the chinese car manufacturer Geely.

This is a sad ass article with some sad ass comments attached. For background, China subsidizes BYDs electric vehicle production (not domestic sales) as a result they have literal fields of low quality cars they cant sell that they've been dumping on the third world.

Things many not be going rosy for any of you, but dont think for a second that the grass is any greener in China. You guys buy a BYD, you're buying a coffin that will take the fire department hours to put out.

The comments here are weird. Someone even tried to defend the quality of tools from Harbor Freight, which is absolutely bizarre.

Some of the last numbers I could find about BYDs catching fire in China was about seven per day. Even if it's one per day, that is bad. One per week is still bad.

I've read it a few times that China is due to take over as the worlds biggest economy by the year 2040/2045