Are the Chinese a Threat to the US Auto Industry?
I'm not surprised this was a hot topic at the Automotive News Congress this week. But it raises some interesting questions.
Per Automotive News, a
utomakers cited "possible worst-case scenarios from a Chinese landfall: cutthroat price competition, market share losses for legacy automakers, mass consumer data collection, and ravaged dealer earnings." Isn't there legislation already in place to prevent item #3? And are items #1, #2, and #4 significantly different from the threats posed by the Japanese in the 1980s?
The conservative American Compass looked at the voluntary quotas on Japanese exports that began in 1981 as an effort to avoid an outright trade war. The case study notes "After decades of intensive state support, Japanese firms had developed the world’s most efficient production processes and made the highest-quality cars." Sound familiar?
The study also notes, "Within a decade, the import quota generated:
🔹$25+ billion in foreign capital investment (2022 dollars)
🔹8 new auto assembly plants
🔹300+ new production facilities
🔹100,000+ new American jobs"
I'd also posit that they led American automakers to develop higher-quality, more fuel-efficient—and thus more competitive—cars and trucks.
"The debate reflects mounting anxiety that Chinese automakers — now blocked from the U.S. by steep tariffs and political opposition — might eventually export to or manufacture in America." I haven't heard of a single politician, on either side of the aisle, who supports lifting those tariffs, which makes "built-in-America" the most financially viable route to sell here. Do these automakers think they can't build cars and trucks as good as Chinese vehicles built here?
Former Chrysler CEO Lee Iacocca once said, "In the car business, you either lead, follow, or get out of the way." We can control the narrative, but an outright ban is not the move of a leader.
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