From the article: [...] [...] [...] [...] [...] [...] archive link
From the article:
A stark mismatch between production at Chinese factories and local demand has been caused, in part, by industry executives mis-forecasting three key trends: the rapid decline of internal combustion engine car sales, the explosion in popularity of electric vehicles and the declining need for privately owned vehicles as shared mobility booms among an increasingly urbanised Chinese population.
The result has been “massive overcapacity” in the number of vehicles produced in factories across the country, said Bill Russo, former head of Chrysler in China and founder of advisory firm Automobility. “We have an overhang of 25mn units not being used,” he said.
[...]
China’s annual vehicle exports, which surpassed those of South Korea in 2021 and Germany in 2022, are now on track to beat Japan’s this year, according to Moody’s data.
However, sales volumes in China peaked in 2017, data from Automobility shows, in line with slowing growth in the country’s middle-class boom and wider economic weakness.
[...]
The overcapacity problem is hitting both local companies such as Chery, SAIC, BYD, Geely and Changan, and an increasing number of foreign groups. Companies including Tesla, Ford, Nissan and Hyundai are among those repositioning their Chinese factories towards export markets, analysts said.
As of the end of July, 2.8mn vehicles had been exported from China this year, including 1.8mn petrol-powered vehicles — up 74 per cent on the previous year — as more domestic consumers opt for EVs and second-hand cars.
[...]
South Korea’s Hyundai is emblematic of the pain felt by legacy auto groups in China. Of the group’s four factories there, two are being used for exports and the other two are up for sale.
“But the thing is, where can it sell its cars made in China? It already has plants in India, Vietnam, Indonesia and Brazil,” said Lee Hang-koo, executive adviser at the Korea Automotive Technology Institute.
“Because of the low utilisation rates in China, its losses there have ballooned in recent years and it won’t be easy to make money out of exports as most of the cars produced there are gasoline cars,” he added.
[...]
Chinese auto exports have mostly targeted developing markets in Europe and Asia, Automobility data shows, with sanctions-hit Russia the top destination this year. Geely’s Coolray crossover is one of the most popular models exported to Russia and sells for about Rbs1.4mn ($14,000).
[...]
Tesla already exports electric cars from its Shanghai facility to Europe and about one-fifth of all EVs sold in Europe are manufactured in China.
[...]
BYD is spearheading China’s EV exports into developed markets. Following a recent briefing with BYD founder and chair Wang Chuanfu, Citi analysts said the company was “confident” of an export sales target of 400,000 units next year, double this year’s forecast.
In short, we need to ban the import of chinese cars so that we can really apply some pressure to them and punish them for this sort of overproduction and dumping on the foreign markets.
In short, we need to ban the import of chinese cars so that we can really apply some pressure to them and punish them for this sort of overproduction and dumping on the foreign markets.
Are new car prices too high or too low? I think most people would say they’re too high, and from that perspective, competition from Chinese manufacturers would be welcome. But from an...
Are new car prices too high or too low? I think most people would say they’re too high, and from that perspective, competition from Chinese manufacturers would be welcome. But from an environmental perspective, maybe for some vehicles, prices are sometimes too low?
A smart way to do it might be to have high efficiency standards for imports. I suspect that the US does have a lot of regulation around that already for both domestic and foreign manufacturers, but light trucks and SUV’s might be exempt?
Yes, light trucks and SUVs are exempt in the US, which is how they're becoming these giant monstrosities. Regulations could and should be made stricter on all cars, but especially imports since...
Yes, light trucks and SUVs are exempt in the US, which is how they're becoming these giant monstrosities.
Regulations could and should be made stricter on all cars, but especially imports since there have been a few cases that I can remember (VW to name one) where they lied about their emissions standards. all cars need to be tested for incredibly strict emissions. Prices should not be as high as they are right now, it's due to manufacturing stoppages from Covid, and prices should be adjusted at this point to reflect that.
We need to get back to smaller, more efficient cars that don't cost a mortgage payment each month to own.
It's not about prices, is about rewarding yet another move from the Chinese that suppresses the value of labor and exports their shitty side effects of authoritarianism - a lack of demand - to the...
It's not about prices, is about rewarding yet another move from the Chinese that suppresses the value of labor and exports their shitty side effects of authoritarianism - a lack of demand - to the rest of the world.
"Dumping" is about prices. The idea is that the prices are lower than other manufacturers can compete with. If that's not true then the argument doesn't work.
"Dumping" is about prices. The idea is that the prices are lower than other manufacturers can compete with. If that's not true then the argument doesn't work.
It's about the means by which the prices are achieved. If they had a revolutionary new price reduction tech that wouldn't be a problem. No. What they are doing is dropping their own labors wages...
It's about the means by which the prices are achieved. If they had a revolutionary new price reduction tech that wouldn't be a problem.
No. What they are doing is dropping their own labors wages and capturing jobs that could be in nations where workers make a higher fraction of their pay by doing it.
They should be shut down as a result and widely barred from the export markets of any nation with a sane trade policy.
Wages as a fraction of productivity are far lower than their peers, and you can see that by looking at their peers like Vietnam or India and comparing consumption percent of GDP. In short, the...
Wages as a fraction of productivity are far lower than their peers, and you can see that by looking at their peers like Vietnam or India and comparing consumption percent of GDP.
In short, the average Chinese person should be making/spending close to 20 percent more as a fraction of their GDP. Instead, that money gets respected by their state to create these systemic trade imbalances.
Okay, this argument fits better with my vague understanding of the situation. Thanks. (My understanding is that the way the government takes a share is by making it hard to bring money made...
Okay, this argument fits better with my vague understanding of the situation. Thanks. (My understanding is that the way the government takes a share is by making it hard to bring money made overseas back to China.)
I don't know what you meant by "respected" though. Wrong word?
My understanding is that China is having trouble selling gas cars in the US because of emissions regulations. They are very proud of catching up in many respects, there is a scene in Wolf Warrior...
My understanding is that China is having trouble selling gas cars in the US because of emissions regulations.
They are very proud of catching up in many respects, there is a scene in Wolf Warrior 2 where the hero rolls his Chinese car and is held in place by the seatbelt. (WW2 is a good movie that I recommend, it is not really anti-American, at one point they call the U.S. Marines for help and would have been glad to work with them but they didn’t answer the phone so they got a “Chinese Rambo” who is more handsome than Stallone. In another scene they are proud to show off modern Chinese warships that look like the canceled Zumwalt class that launch cluster bomb cruise missiles, but they wait for international approval before they launch — funny because U.S. Congressmen were quite appalled in the 1970s by missile ships that didn’t look warlike enough and unfortunately they’ve disappeared in our military imagination, I don’t think you can find a single museum ship of the Ticonderoga class or anything like it even though I’ve seen many of them at the dock in the Philadelphia shipyard awaiting scrappage.)
I thought that scene was meaningful because it is really is a triumph of automotive engineering, I had just rolled my Honda and the seatbelt worked just like it did in the movie, I was hanging upside down, completely unhurt, didn’t even feel any pain, the back window even broke so I had no problem crawling out the back.
The threat China poses to legacy automakers is, I think, electric cars, because carmakers there and in India are making affordable electric cars whereas electrics from western and Japanese carmakers are either super-luxury or size XXL or both.
Way I see it, until the market is flooded with ultra cheap used EV's, then they can get cheaper. People buying luxury cars are not in the same market so I don't think it's that big of a threat...
Way I see it, until the market is flooded with ultra cheap used EV's, then they can get cheaper. People buying luxury cars are not in the same market so I don't think it's that big of a threat since they won't buy cheap cars anyway. Plus, if the market is flooded maybe we'll get more charging stations.
The cheapest used EV is around $10k right now and that's too much for someone barely scraping by. It's why I hate gas taxes, it's just taxing low income people who are stuck with gas vehicles, often with no alternative to driving to work or to get food. So cheap is a good thing right now and if they get labelled as made in China junk then hopefully that'll get people who can afford the more expensive cars to buy those instead. I am only worried about whether they'll be safe, even the luxury cars sometimes catch fire. Also if they turn out to be good quality despite being cheap, that could be an issue.
From the article:
[...]
[...]
[...]
[...]
[...]
[...]
archive link
In short, we need to ban the import of chinese cars so that we can really apply some pressure to them and punish them for this sort of overproduction and dumping on the foreign markets.
Are new car prices too high or too low? I think most people would say they’re too high, and from that perspective, competition from Chinese manufacturers would be welcome. But from an environmental perspective, maybe for some vehicles, prices are sometimes too low?
A smart way to do it might be to have high efficiency standards for imports. I suspect that the US does have a lot of regulation around that already for both domestic and foreign manufacturers, but light trucks and SUV’s might be exempt?
Yes, light trucks and SUVs are exempt in the US, which is how they're becoming these giant monstrosities.
Regulations could and should be made stricter on all cars, but especially imports since there have been a few cases that I can remember (VW to name one) where they lied about their emissions standards. all cars need to be tested for incredibly strict emissions. Prices should not be as high as they are right now, it's due to manufacturing stoppages from Covid, and prices should be adjusted at this point to reflect that.
We need to get back to smaller, more efficient cars that don't cost a mortgage payment each month to own.
It's not about prices, is about rewarding yet another move from the Chinese that suppresses the value of labor and exports their shitty side effects of authoritarianism - a lack of demand - to the rest of the world.
"Dumping" is about prices. The idea is that the prices are lower than other manufacturers can compete with. If that's not true then the argument doesn't work.
It's about the means by which the prices are achieved. If they had a revolutionary new price reduction tech that wouldn't be a problem.
No. What they are doing is dropping their own labors wages and capturing jobs that could be in nations where workers make a higher fraction of their pay by doing it.
They should be shut down as a result and widely barred from the export markets of any nation with a sane trade policy.
Are wages going down in China? That would be interesting if true, I thought it was the opposite.
Wages as a fraction of productivity are far lower than their peers, and you can see that by looking at their peers like Vietnam or India and comparing consumption percent of GDP.
In short, the average Chinese person should be making/spending close to 20 percent more as a fraction of their GDP. Instead, that money gets respected by their state to create these systemic trade imbalances.
Okay, this argument fits better with my vague understanding of the situation. Thanks. (My understanding is that the way the government takes a share is by making it hard to bring money made overseas back to China.)
I don't know what you meant by "respected" though. Wrong word?
Yeah, that was a speech to text flub.
My understanding is that China is having trouble selling gas cars in the US because of emissions regulations.
They are very proud of catching up in many respects, there is a scene in Wolf Warrior 2 where the hero rolls his Chinese car and is held in place by the seatbelt. (WW2 is a good movie that I recommend, it is not really anti-American, at one point they call the U.S. Marines for help and would have been glad to work with them but they didn’t answer the phone so they got a “Chinese Rambo” who is more handsome than Stallone. In another scene they are proud to show off modern Chinese warships that look like the canceled Zumwalt class that launch cluster bomb cruise missiles, but they wait for international approval before they launch — funny because U.S. Congressmen were quite appalled in the 1970s by missile ships that didn’t look warlike enough and unfortunately they’ve disappeared in our military imagination, I don’t think you can find a single museum ship of the Ticonderoga class or anything like it even though I’ve seen many of them at the dock in the Philadelphia shipyard awaiting scrappage.)
I thought that scene was meaningful because it is really is a triumph of automotive engineering, I had just rolled my Honda and the seatbelt worked just like it did in the movie, I was hanging upside down, completely unhurt, didn’t even feel any pain, the back window even broke so I had no problem crawling out the back.
The threat China poses to legacy automakers is, I think, electric cars, because carmakers there and in India are making affordable electric cars whereas electrics from western and Japanese carmakers are either super-luxury or size XXL or both.
Way I see it, until the market is flooded with ultra cheap used EV's, then they can get cheaper. People buying luxury cars are not in the same market so I don't think it's that big of a threat since they won't buy cheap cars anyway. Plus, if the market is flooded maybe we'll get more charging stations.
The cheapest used EV is around $10k right now and that's too much for someone barely scraping by. It's why I hate gas taxes, it's just taxing low income people who are stuck with gas vehicles, often with no alternative to driving to work or to get food. So cheap is a good thing right now and if they get labelled as made in China junk then hopefully that'll get people who can afford the more expensive cars to buy those instead. I am only worried about whether they'll be safe, even the luxury cars sometimes catch fire. Also if they turn out to be good quality despite being cheap, that could be an issue.