[edge]

http://www.atimes.com/atimes/China_Business/HL01Cb04.html

Auto sector to drive China's exports

BEIJING - Following on the heels of textiles, household electrical appliances, information-technology products and electromechanical products, automobiles and auto parts and components are expected to become a new engine that will push China's exports in the coming years.

The automobile industry, as an industry of high technology content, has long been dominated by European and North American producers.

In 2004, when a Chinese auto producer claimed that it would export passenger cars to the United States in batches by 2008, it was regarded as a joke by many people. However, it only took Chinese car makers two years to demonstrate that it is not an unachievable target to export cars to advanced countries.

At the recent Beijing International Auto Show, the president of Chrysler Group announced that the company will select a Chinese company as a partner to develop compact cars jointly for the North American market.

Earlier, Fiat Auto and Chery Auto had signed a memorandum according to which Chery will supply Fiat with 1.6- and 1.8-liter engines for producing Fiat cars at home and abroad. The annual engine supply is predicted to exceed 100,000 units.

This recognition from international auto giants indicates that the gap between China's auto industry and the world's leading car makers has been narrowed, and cars labeled "Made in China" have been gradually accepted by the international market.

In China, when an industry possesses a certain competitive edge, enterprises will actively explore the overseas market.

The automobile industry is not an exception.

Statistics show that China's export of auto products amounted to US$20.508 billion in the first three quarters of this year, soaring 45.37% over the previous year, and the export value was US$5 billion more than the import value.

Even the export of sedans, once the weak point of car exports, soared by 2.5 times, reaching 67,300 units in the period.

The sudden rise of the automobile industry has encouraged related governmental departments.

The Ministry of Commerce (MOC) concludes that the export of consumer-electronics products has not maintained particularly rapid growth since last year, and export growth must be pulled up by some other industry.

While auto products have been among the major contributors to the world's trade volume, accounting for about 10% of the total, it will become China's key export product in the future.

Now is a critical moment for China to develop home-brand cars, Chinese Vice Minister of Commerce Wei Jianguo has said repeatedly.

The MOC is actively promoting the export of autos and auto parts and components.

In August, the MOC awarded eight cities and 160 auto and auto-part and component producers the title of the State's First Batch of Auto and Auto Part and Component Export Base (or Enterprise).

The goal of China's auto industry is to make up 10% of the world's auto trade volume in about 10 years, that is, to realize an export value of more than $120 billion.

However, industry experts also point out that for Chinese auto makers, the pace of going global shouldn't be too fast because if the product quality and after-sale service can't be guaranteed, it will hurt the reputation of cars made in China.

What's more, domestic enterprises must pay great attention to research and development so as to avoid lawsuits concerning intellectual-property rights, and foreign non-tariff barriers and trade frictions about auto products need long-term concern.

(Asia Pulse/XIC)

 

[Real_I_Hate_China]

Given that both US(GM and Ford) and Euro(VW and DCX) automakers are in deep financial trouble, the Chinese has picked the worst time to push auto exports.

Even if Chinese grab a 0.1% market share, Chinese gets blamed for the bankruptcy of Ford, not Toyota.

 

[BringIt]

Nah, this is the PERFECT time to go to other markets - while these giants are weak.

I've said it a million times, Chinese cars will only take sales away from other Asian car makers, so GM and Ford and other Euro companies can rest easy - for a while.

 

[WuzhengNA]

Nah, this is the PERFECT time to go to other markets - while these giants are weak.

I've said it a million times, Chinese cars will only take sales away from other Asian car makers, so GM and Ford and other Euro companies can rest easy - for a while.

I must agree - I don't know if it waqs"BringIt who said it in anotherpost, but someone gave an excellent point - Buyers of strictly american-made vehicles are not going to move over into a Chinese made vehicle. The Chinese made vehicles will take market share from other Asian auto makers.

 

[Real_I_Hate_China]

Buyers of strictly american-made vehicles are not going to move over into a Chinese made vehicle.

If that was the case, then GM and Ford would not have lost the market share at all.

The fact is that most of Kia Amanti owners are former Buick owners; the group considered to be most loyal to American brands.

Whether the Chinese vehicles actually make an impact in the developed markets is irrelevant; their presence alone is the cause of a trade friction.

 

[renyeo]

Unless the Chinese cars are miraculously superior somehow, mysteriously than the Koreans and budget-end American models, they run the risks of being an also-run in the marketplace. Assuming former is the case, why didn't the Koreans (and even the Japanese) think of it in the first place?

Is there a secret formula from the Chinese or was it just a self-deluding conclusion on the part of some? Costs is one reason but surely is not the all-encompassing ingredient right?

 

[KING_OF_HILL]

Trade friction

Whether the Chinese vehicles actually make an impact in the developed markets is irrelevant; their presence alone is the cause of a trade friction.

Trade friction is nothing new, it didnt stop Japs from making more cars here in US. Chinese auto gang will follow their footsteps and set up manufacture bases here in the states and assemble cars out of kits shipped from China.

I bet if you open up the hood of your 98 camery you will see "made in japan" on your engine, transmission, compressor...

 

[KING_OF_HILL]

A tale of 2 worlds

Given that both US(GM and Ford) and Euro(VW and DCX) automakers are in deep financial trouble,

the Chinese has picked the worst time to push auto exports.

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--...... for good or for evil, in the superlative degree of comparison only."


I LOVE Dickens!

Timing couldn't be better than this. If Japanese and Koreans are going to bring down GM/FORD/DCX, as an average American consumer I prefer to have as many choices as possible to increase competition and max my gain.

You will benefit from this too when you go out to buy your next Camery.



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[Real_I_Hate_China]

Trade friction is nothing new

Except that China already enjoys a record trade surplus with developed nations. Imagine the political outcry should this massive surplus was to double or even triple.

it didnt stop Japs from making more cars here in US.

Japanese and Koreans were already paying higher wages at home than in the US at the time of transplant openings.

The moment Chinese start paying US salaries, it loses all its wage advantages.

Chinese auto gang will follow their footsteps and set up manufacture bases here in the states and assemble cars out of kits shipped from China.

Nope. This does not happen until Chinese wage level matches the US level. Additionally, there is no cost saving in a CKD operation.

I bet if you open up the hood of your 98 camery you will see "made in japan" on your engine, transmission, compressor...

Actually engine and transmission are made in the US.

as an average American consumer I prefer to have have as many choices as possible to increase competition and max my gain.

You won't want to drive one after taking a look at one of those Chinese cars.

 

[KING_OF_HILL]

Except that China already enjoys a record trade surplus with developed nations. Imagine the political outcry should this massive surplus was to double or even triple.

China's gain will largely come at a cost of Korean auto makers and a slice of Japanese low end segment. The total deficit against Asian auto makers will decrease as a result of lower sticker price on Chinese cars, a real saving for average Joes.

Anti-globalization sentiment is on the raise here in US, however, political outcry against a single country like China is highly unlikely. After all, China has been the #1 source of trade deficit for a couple of years now, you don't see a political outcry in Washington. In Washington, there is NO systematic approach towards this trade deficit issue because a significant portion of the money is being pocketed by American multinationals. The interest group led by companies like Walmart, BOEING are way to powerful (2nd only to pro-jews groups) even liberals like Pelosi a long time outspoken hard-liner had to soften her stand after she came to power. Just do some reading with wall street journal.

I would try to find my way to cash into this opportunity rather than betting against it. :nod:

Japanese and Koreans were already paying higher wages at home than in the US at the time of transplant openings.

No...No...NO. Average hourly rate for Korean auto worker is $27/hr and it is $57/hr here in US after you factor in all the legacy costs. Numbers vary a little depending on your source but koreans only get about half of what their US counterparts make. Don't be in denial.

The moment Chinese start paying US salaries, it loses all its wage advantages.

Tell me why Korean cars are cheaper than the Japanese cars?

Argue all you want, but the truth is labor cost is cheaper in Korea which is an advantage they wont be able to hold on to for much longer.

Read this BusinessWeek report, their position in the value chain is quickly being eroded by China, they are fighting a losing battle.

http://www.businessweek.com/magazine/content/05_17/b3930028.htm

Actually engine and transmission are made in the US.

Well, at least you admit the compressor is foreign made.

Relax, take a deep breathe then take off your eye mask and look again.

I had a 02 Honda Accord and it had 35% Japanese components including engine, transmission... listed right on the invoice sticker.

You won't want to drive one after taking a look at one of those Chinese cars.

Wait a second... I think I just saw a bunch of Chery cars 2 weeks ago when I was in Beijing for a LNG conference. My colleagues who have never been to China dropped their jaws when they first saw that FULLWIN and its price tag. They kept asking me how come they had never seen one of these in Houston.

They want to know about the quality too (of course, stigma) and I asked them if they remembered the 90s when we were all in college with a little bitty budget and had to choose between a Huiyndai or a bicycle and you had to choose the bicycle because it was more reliable...



Then they all got it...oooh, it can't be worst than that...



Actually, after checking out those Chery cars inside out I have to say they even beat my own expectations. Even thou I couldn't test drive them, the build quality and design are approaching the Toyotas across the hall way.

Even if they are not 100% ready to enter US at the moment, they are more than half way there and that is a fair statement.




>

 

[Real_I_Hate_China]

China's gain will largely come at a cost of Korean auto makers and a slice of Japanese low end segment.

No global giant wants to be in the low end anyway, no profit there.

The total deficit against Asian auto makers will decrease as a result of lower sticker price on Chinese cars, a real saving for average Joes.

That is if

1. Chinese cars can make it to developed markets.
2. Joes actually want to be seen in a Chinese car.

Anti-globalization sentiment is on the raise here in US, however, political outcry against a single country like China is highly unlikely.

So you missed out the last political outcry against Japan.

After all, China has been the #1 source of trade deficit for a couple of years now, you don't see a political outcry in Washington.

That was before the Democratic takeover.

No...No...NO. Average hourly rate for Korean auto worker is $27/hr and it is $57/hr here in US after you factor in all the legacy costs. Numbers vary a little depending on your source but koreans only get about half of what their US counterparts make. Don't be in denial.

Average Annual Wage at Hyundai's Korean factory : ~USD 70,000
Average Annual Wage at Hyundai's Alabama factory : USD 51,840
It's called the power of unionizatoin.

Average Annual Wage at Toyota's Japanese factory : USD 100,000

Tell me why Korean cars are cheaper than the Japanese cars?

It's called the strategic pricing.

Argue all you want, but the truth is labor cost is cheaper in Korea

Not for Hyundai, which has a ultra-militarsitic union that make UAW pussycats and Hyundai resorted to super automation(hardly any worker in its latest plants) and super just-in-time to cut cost. Go to the Alabama plant and there are like 10 workers in the whole building section.

which is an advantage they wont be able to hold on to for much longer.

Sorry to disprove you.

Read this BusinessWeek report, their position in the value chain is quickly being eroded by China, they are fighting a losing battle.

Interestingly, Korea is now the largest auto parts exporter to China this year.

They kept asking me how come they had never seen one of these in Houston.

1. Can't pass emissions test.
2. Can't pass crash test.

Actually, after checking out those Chery cars inside out I have to say they even beat my own expectations.

So your expection is rather low.

Even thou I couldn't test drive them, the build quality and design are approaching the Toyotas across the hall way.

Now we know you are smoking something.

Even if they are not 100% ready to enter US at the moment, they are more than half way there and that is a fair statement.

Well, Chery's like 10 year old, so only 10 more years to go until the first Chery that could pass US crash and emissions test emerges.

 

[KING_OF_HILL]

No global giant wants to be in the low end anyway, no profit there.

Now you apply double standards. Japanese/Koreans all started from low end didn't they?

That is if

1. Chinese cars can make it to developed markets.
2. Joes actually want to be seen in a Chinese car.

After the show, I have NO doubt at this point that they are coming. What I really want to know right now is their import scheme and wether or not they will have another importer so that I can buy in their stocks/options early in the game.

That is if

1. Chinese cars can make it to developed markets.
2. Joes actually want to be seen in a Chinese car.

What difference does it make to average Joes (or Jose here in Texas) if they drive a korean car or a chinese car? I guess the poor Chinese human rights record must have put a huge burden on their conscience. They must feel really guilty after buying cart loads of goods from Walmart every Saturday so that they have to go straight to church afterwards to confess.

So you missed out the last political outcry against Japan.

You know what makes me sick lately? A TV commercial from Toyota, "... from foothill of Indiana .... a company called Toyota... doing our part to add to the beautiful landscape of America ...". I guess I must have missed out on the last political outcry against Japan because for some reason they are still around and still dominating all segments.

That was before the Democratic takeover.

What's up with Democrate majority leader Polese lately? Not only she has a bad taste for what she wears, all her hand-picks were turned down in the congress. She better don't try to pick a fight at this time, I hate to see an old lady running into a brick wall, it is only funny on Simpsons.

Average Annual Wage at Hyundai's Korean factory : ~USD 70,000
Average Annual Wage at Hyundai's Alabama factory : USD 51,840
It's called the power of unionizatoin.

Average Annual Wage at Toyota's Japanese factory : USD 100,000

reveal your source.

In an economy where GDP per cap is less than half of that in US, their auto workers make way more...hmmm... I guess korean union workers must have found out some union tricks that UAW (United Auto Workers) here in US didn't know about.

It's called the strategic pricing.

Did Koreans pattern the idea of strategic pricing?

Not for Hyundai, which has a ultra-militarsitic union ...

I strongly believe these ultra-militarsitic style Korean worker unions one day will bring down the whole Korean society. The causes for these unions are deeply rooted in Korean society and culture. I don't want to go in there right now, but trust me it is a time bomb and clock is ticking.

...that make UAW pussycats and Hyundai resorted to super automation(hardly any worker in its latest plants) and super just-in-time to cut cost. Go to the Alabama plant and there are like 10 workers in the whole building section.

Again, neither automation nor just-in-time was first invented by Koreans, anybody can purchase those welding robots from vendors. Even some of small Chinese truck makers are now using ABB robots.

Interestingly, Korea is now the largest auto parts exporter to China this year.

Can't beat them, join them.

Besides, once the transfer of "know-how" is complete Koreans wouldn't be much of use to Chinese.

1. Can't pass emissions test.
2. Can't pass crash test.

Try not to hold on to these arguments for too long.
If Koreans can manipulate the crash test to get a #1 rating so can everyone else. Sedona isn't really safe, everyone knows it's just that KIA figured out how to cheat the crash test.

So your expection is rather low.

I certainly don't put my expectations that I have on my Lexus on these 10K/15K cars.

Now we know you are smoking something.

Na, haven't smoked anything for a long time. Have to watch out for those work place random drug tests. Certainly looking forward to have a vocation in Netherland thou. Man, I miss those Jamaica brownies I used to get from friends around Christmas time...

Well, Chery's like 10 year old, so only 10 more years to go until the first Chery that could pass US crash and emissions test emerges.

Hmmm.... You lost me there.

In Texas, you can drive as young as 15. You only have to be 18 to purchase a gun, so if you want to do a drive-by you really only have to be 18, not 20.




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[Real_I_Hate_China]

Now you apply double standards. Japanese/Koreans all started from low end didn't they?

Low end is unprofitable, but important nevertheless because it draws first time buyers into a specific brand. This is the reason hy the low end is rather fierce in the US. This is where Chinese fish must swim in.

After the show, I have NO doubt at this point that they are coming.

Is that tomorrow or 10 years from now?

What difference does it make to average Joes (or Jose here in Texas) if they drive a korean car or a chinese car?

If matters a lot if you are in the dating game.

You know what makes me sick lately? A TV commercial from Toyota, "... from foothill of Indiana .... a company called Toyota... doing our part to add to the beautiful landscape of America ...". I guess I must have missed out on the last political outcry against Japan because for some reason they are still around and still dominating all segments.

You missed out the outcry of 80s, which resulted in Japan's self-imposed export limit of 2.1 million vehicles, doubling of yen's value, and the beginning of transplants.

Since then, the tolerance limit has been lowered to 1 million units/year due to troubles at GM, Ford, Delphi, and Visteon. This 1 million quota must be split between Chery, Geely, SAIC, Nanjing, FAW, Brilliance, Great Wall, and a dozen more would be exporters.

reveal your source.

There is a Korean poster(superidler) on this board, you can ask him to confirm the wage level. Hyundai's militant union's wage level is no secret.

In an economy where GDP per cap is less than half of that in US, their auto workers make way more...hmmm... I guess korean union workers must have found out some union tricks that UAW (United Auto Workers) here in US didn't know about.

Yup. Those militant union works with a precision of a marine corp. The trick is to become a pseudo political party.

I strongly believe these ultra-militarsitic style Korean worker unions one day will bring down the whole Korean society.

Yup. This is why Hyundai's capacity expansion has been made only in overseas.

Can't beat them, join them.

Besides, once the transfer of "know-how" is complete Koreans wouldn't be much of use to Chinese.

The importer of those parts are Hyundai and GM(Which sells Daewoo vehicles in China), not Chinese.

Again, neither automation nor just-in-time was first invented by Koreans, anybody can purchase those welding robots from vendors.

Hyundai makes its own steel and robots. And the just-in-time used by Hyundai isn't Toyota-style just-in-time, it's something called "super just-in-time". Basically place an order for the module and the whole module is assembled and delivered to factory floor in four hours.

Even some of small Chinese truck makers are now using ABB robots.

Try to visualize why Hyundai makes its own robots instead of buying them from somebody else.

If Koreans can manipulate the crash test to get a #1 rating so can everyone else.

Easier said than done.

Sedona isn't really safe, everyone knows it's just that KIA figured out how to cheat the crash test.

Maybe Chinese need to bribe someone to learn how Kia fooled IIHS to obtain the "Safest Passenger Vehicle" rating.

I certainly don't put my expectations that I have on my Lexus on these 10K/15K cars.

You can buy a Toyora Echo or a Honda Fit for that money. Again, no point in buying Chinese.

In Texas, you can drive as young as 15. You only have to be 18 to purchase a gun, so if you want to do a drive-by you really only have to be 18, not 20.

Chery the replica motor company is 10 years old. Since you say Chery is half way to US regulation compliance, it will take another 10 years before Chery can pass the US regulation.

 

[KING_OF_HILL]

Low end is unprofitable, but important nevertheless because it draws first time buyers into a specific brand. This is the reason hy the low end is rather fierce in the US. This is where Chinese fish must swim in.

I think we are in agreement here, that Chinese will come in from the low end. The only difference is I wish they have a safe swim and you wish there would be a giant Anaconda waiting. OK.

If matters a lot if you are in the dating game.

Hmmm??? You mean dating games like "blind date"? If you want to impress the girl you need a luxury car. If you are thinking of something else you need a cargo van. Neither is what Chery is gonna bring.

This 1 million quota must be split between Chery, Geely, SAIC, Nanjing, FAW, Brilliance, Great Wall, and a dozen more would be exporters.

Point taken. 1 million is a lot of room to grow.

There is a Korean poster(superidler) on this board, you can ask him to confirm the wage level. Hyundai's militant union's wage level is no secret.

Have to say there is a huge discrepancy here. What goes up must come down, in other words if you are in a market economy you have to follow market rules and principles, I wonder if koreans used a different accounting scheme. Hopefully SUPERIDLER will be able to provide details on how they come up with those numbers, not just the numbers along. I have my fingers crossed.

Yup. Those militant union works with a precision of a marine corp. The trick is to become a pseudo political party.

Yes, in the rest of the world it's called Mafia.

Basically place an order for the module and the whole module is assembled and delivered to factory floor in four hours.

OK, four hours is the target to beat but not necessarily the threshold to enter.

Try to visualize why Hyundai makes its own robots instead of buying them from somebody else.

I close my eye and try to visualize it and all I can come up with is their natural resistance to anything foreign. You can't be expert in every single field, BOEING doesn't make its own engines. If you try to do too much, that is exactly how you fail.

Easier said than done.

They will looking into how to play JD Powers and IIHS games once they establish their foothold.

Maybe Chinese need to bribe someone to learn how Kia fooled IIHS to obtain the "Safest Passenger Vehicle" rating.

I expect them to do so. Hire the same consulting companies to fortify one model, beat the test, then try to sell the impression of safety to American consumers by over generalizing it.

You can buy a Toyora Echo or a Honda Fit for that money. Again, no point in buying Chinese.

There are two problems with your statement. (1). you don't know how they gonna price them. Now Malcom is no longer in the middle(btw, I really hate that show), all your previous estimates are no longer valid. (2). They are going after Koreans, not Japanese when they arrive here. As long as there is a market for Korean cars there will be one for the Chinese made. I'm sure being price competitative against Koreans will be their primary objective.

Chery the replica motor company is 10 years old. Since you say Chery is half way to US regulation compliance, it will take another 10 years before Chery can pass the US regulation.

Always read the fine prints brother, I said "... they are more than half way there and that is a fair statement....". They rolled out their first car a little over 6 years ago, and if you apply my statement that means less than 6 years from now they will reach their prime time.






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[Real_I_Hate_China]

you wish there would be a giant Anaconda waiting. OK.

I am not wishing, it is the fact. There are big bad sharks called Toyota and Honda swimming in the water ready to swallow up Chinese fish.

If you want to impress the girl you need a luxury car. If you are thinking of something else you need a cargo van. Neither is what Chery is gonna bring.

Young men won't buy Chery because it won't impress girls.
Married men won't buy Chery because their wives oppose "unreliable" Chinese cars.
Married women drive SUV or minivan and won't consider "unsafe" Chinese vehicles.

1 million is a lot of room to grow

Divide up 1 million quota among 12 automakers, and each automaker gets 80k units to export. That's not a lot. This forces Chinese brands to establish transplants at the earliest date possible, which is beyond the means of Chinese brands.

Yes, in the rest of the world it's called Mafia.

Hyundai management got toughened up dealing with a labor mafia for two decades, and this is how they managed to cut cost, not by means of lower wage but by means of production efficiency.

OK, four hours is the target to beat but not necessarily the threshold to enter.

Faster the turnaround, cheaper it becomes. Hyundai essentially has no inventory; modules are produced and put into the finished car on the same day. Making your own steel, especially high strength steel sheet necessary to get good crash ratings, cuts cost significantly as well.

I close my eye and try to visualize it and all I can come up with is their natural resistance to anything foreign.

No, even robots are specifically designed and customized to Hyundai's production process.

You can't be expert in every single field, BOEING doesn't make its own engines. If you try to do too much, that is exactly how you fail.

Toyota became the king of automobile via a vertical integration; it controls every step of the production. That was until Toyota met Hyundai, a company that even makes its own steel, production robots and electric components, stuffs that Toyota doesn't make.

Hire the same consulting companies to fortify one model, beat the test, then try to sell the impression of safety to American consumers by over generalizing it.

It requires engineering skill and money to fortify a model, something that Chinese lack.

There are two problems with your statement. (1). you don't know how they gonna price them.

Geely was quoting $10K for its US model, before scraping the plan. Likewise Dongfeng is quoting $25K for its Japan export model. Nanjing will price MGs above $35K for sure. Chinese cars don't carry the price impact that Japanese and Korean cars did back in the 70s and 80s.

They are going after Koreans, not Japanese when they arrive here.

Then they picked the wrong target since Korean product focus is on large and full-size sedans and SUVs in $20K~35K price range. You may have noticed that Hyundai/Kia is losing market share in B-segment while gaining in D and E-segment.

As long as there is a market for Korean cars there will be one for the Chinese made.

You mean large & full size Chinese sedans and SUVs.

They rolled out their first car a little over 6 years ago, and if you apply my statement that means less than 6 years from now they will reach their prime time.

Who knows what Japanese and Korean cars will be like in year 2012. You do know that Japanese and Korean auto makers could develop new cars faster than Chery could, within 14~20 months?

 

[KING_OF_HILL]

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Wow, I really roused you up didn't I?

I am not wishing, it is the fact. There are big bad sharks called Toyota and Honda swimming in the water ready to swallow up Chinese fish.

The sharks will be busy chasing those korean merkels, Chinese fish is not a real thread to them and not much meat there either.

Young men won't buy Chery because it won't impress girls.
Married men won't buy Chery because their wives oppose "unreliable" Chinese cars.
Married women drive SUV or minivan and won't consider "unsafe" Chinese vehicles.

You do know that was a joke right?

Divide up 1 million quota among 12 automakers, and each automaker gets 80k units to export. That's not a lot. This forces Chinese brands to establish transplants at the earliest date possible, which is beyond the means of Chinese brands.

Are you assigning quotas to the Chinese auto makers? I thought you hated those Commi style central planning stuff.

It would be first come first serve (or all you can eat buffet style, with no refill), whoever gets here first has a room of 1 m to grow. Btw, 80K IS a lot for all those Chinese auto makers.

Hyundai management got toughened up dealing with a labor mafia for two decades,...

In order to defeat evils they became evils...

and this is how they managed to cut cost, not by means of lower wage but by means of production efficiency.

A company without internal synergy, I sure wouldn't want to hold on to their stocks for very long.

No, even robots are specifically designed and customized to Hyundai's production process.

Wow, they really hate foreign stuff.

Toyota became the king of automobile via a vertical integration; it controls every step of the production.

I hear the word vertical integration everyday. In the energy/ultility world, it was once praised as the perfect system now blamed for everything failed. These days, the "de-regulation" is the buzz world.

From a pure business perspective, you only as strong as your weakest link, if you stretch yourself too long you bound to have weakest links that makes you vulnerable. Do-everything-yourself is the worst for price control and efficiency because there is no competition in the process. I don't know if koreans are coming to US with business books written by koreans.

I hope koreans realize this sooner than later, but given their stubberness they will pay a hell of a price one day. :nod:

That was until Toyota met Hyundai, a company that even makes its own steel, production robots and electric components, ...

Are you saying Huyndai is the most efficient company in the world in steel making, electronics, robot design ... etc?

If you say yes then you are lying or simply chose not to see the truth. A company good at everything simply doesn't exist.

If your answer is no then they are really doing business the most efficient way.

stuffs that Toyota doesn't make.

Can't agree more with you on this. TOYOTA DOESN'T make everything.

It requires engineering skill and money to fortify a model, something that Chinese lack.

Unreasonable assumption.

Chinese cars don't carry the price impact that Japanese and Korean cars did back in the 70s and 80s.

I disagree. Chinese cars will be priced lower or more "loaded" than their korean counterparts.

Then they picked the wrong target since Korean product focus is on large and full-size sedans and SUVs in $20K~35K price range. You may have noticed that Hyundai/Kia is losing market share in B-segment while gaining in D and E-segment.

koreans made their shift in the last couple of years, Azera is a testament that even the most competative segment still can be penatrated if you get the price/quality combo right.

I can't help to wonder how the hell in the world the all mighty Huyndai lost its share in B segment. I can see the argument shotting back at me is that they lost it to Japanese and what Japanese can do Chinese won't be able to do... Ok, I still believe what I believe. :lol:

You mean large & full size Chinese sedans and SUVs.

No. I mean across the board, eventually a full out war with all korean models in every segment, not just from Chery but a host of chinese auto makers that are coordinated by the Chinese export policy to attack auto makers like Huyndai and KIa. Americans can't care less. The very same nightmare you try to deny.

Who knows what Japanese and Korean cars will be like in year 2012.

I do. A chassis on 4 wheels.

You do know that Japanese and Korean auto makers could develop new cars faster than Chery could, within 14~20 months?

It doesn't matter because consumer demand does not change significantly every 14~20 months.

Test the water first then slowly perfect your flagship product in that segment over time, that is the proven winning strategy of Toyota.

Truth to be told, they will be here and here to stay. :nod:




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[Real_I_Hate_China]

The sharks will be busy chasing those korean merkels,

And Hyundai/Kia doesn't really care, as long as they increase their D & E segment sales.

Chinese fish is not a real thread to them and not much meat there either.

Once Korean merkels are gone Chinese are the next. Hungry sharks got to keep feeding.

Are you assigning quotas to the Chinese auto makers?

It will be the job of the communist party economic planner, not me. The tolerable limit is 1 million vehicles a year. How this quota is divided among China's 12 exporter wannabes is not my decision to make.

I thought you hated those Commi style central planning stuff.

But China is a communist country.

Wow, they really hate foreign stuff.

Robots themselves contain trade secret.

These days, the "de-regulation" is the buzz world.

Toyota quality comes from vertical integration.

From a pure business perspective, you only as strong as your weakest link, if you stretch yourself too long you bound to have weakest links that makes you vulnerable.

Given Hyundai's past as a 100-head hydra before the three company split, managing many heads is not a problem; they have a 40 year experience doing it.

Do-everything-yourself is the worst for price control and efficiency because there is no competition in the process.

Then the whole Toyota business model is impossible according to that logic. Yet everyone aspires to be like Toyota.

I don't know if koreans are coming to US with business books written by koreans.
I hope koreans realize this sooner than later, but given their stubberness they will pay a hell of a price one day.

You are confusing horizontal integration with vertical integeration. Sony is the most horizontally integrated CE company in the world and they are going bankrupt. Samsung is the most vertically integerated CE company in the world and they make more profit in a year than what Sony has made in a decade. Clearly, vertical integration is the choice of management method for Asia's most successful companies, Toyota and Samsung.

Are you saying Huyndai is the most efficient company in the world in steel making, electronics, robot design ... etc?

Nope. It is like a river, a continuous single flow, with vertically integrated companies like Toyota and Hyundai, with Hyundai going a little more upstream than Toyota does. This is the best way to move the maximum volume of water. This is why Toyota has put Hyundai as its biggest long-term threat, because Toyota realized that Hyundai had mastered its management techniques and has gone even further.

[/quote]Unreasonable assumption.[/quote]
You can call me wrong when Chinese pass EuroNCAP.

I disagree. Chinese cars will be priced lower or more "loaded" than their korean counterparts.

Given Geely CK's $10,000 MSRP and Dongfeng's $25K MSRP, Chinese brands have yet to prove that they could be cheaper while meeting all relevant regulations.

I can't help to wonder how the hell in the world the all mighty Huyndai lost its share in B segment.

Hyundai's moving its B-segment line to India.

I do. A chassis on 4 wheels.

With the safety and durability performance that Chinese can only dream of.

It doesn't matter because consumer demand does not change significantly every 14~20 months.

Your competition doesn't stand still. What was a competitive car two years ago may not be competitive today and require a redesign.

 

[KING_OF_HILL]

And Hyundai/Kia doesn't really care, as long as they increase their D & E segment sales.

Once Korean merkels are gone Chinese are the next. Hungry sharks got to keep feeding.

Self conflicting here... Sry, can't have it both ways.

It will be the job of the communist party economic planner, not me. The tolerable limit is 1 million vehicles a year. How this quota is divided among China's 12 exporter wannabes is not my decision to make.

Aaaaha... I think you just admitted when Chery gets here it will have a room of 1m before it will have to worry about any trade frictions.

But China is a communist country.

You are only half right. I call it a communist-led-capitalism, they have the most pro business government that I've ever dealt with. Congress outlawed trade with Cuba/N Korea/Vietnam while China has been the #1 trading partner for a long time.
Now, your turn to trash them all you want. :gym:

You are confusing horizontal integration with vertical integeration. Sony is the most horizontally integrated CE company in the world and they are going bankrupt. Samsung is the most vertically integerated CE company in the world and they make more profit in a year than what Sony has made in a decade. Clearly, vertical integration is the choice of management method for Asia's most successful companies, Toyota and Samsung.

When a new company is on the raise, it usually have about 20 years during which it is innovative and its stock keeps raising. History repeats itself, what happened to Sony will happen to Samsnug. Remember the days when Sony was like unstoppable? Last round of Asian financial crisis revealed a lot of cracks in korean economy (like government-big business ties, parental style control...etc), instead of fixing them they just patched them superficially. The whole korean economy is a like another ENRON in the making.

Try not to worship them too much.

Nope. It is like a river, a continuous single flow, with vertically integrated companies like Toyota and Hyundai, with Hyundai going a little more upstream than Toyota does. This is the best way to move the maximum volume of water. This is why Toyota has put Hyundai as its biggest long-term threat, because Toyota realized that Hyundai had mastered its management techniques and has gone even further.

Good point.

You can call me wrong when Chinese pass EuroNCAP.

Brilliance Auto did, even though not a perfect 5 but that is a start. Now they are shipping 158,000 units to Europe. So you R WRONG ! Whew... :thumb:

http://www.cctv.com/program/bizchina/20061130/101809.shtml

Given Geely CK's $10,000 MSRP and Dongfeng's $25K MSRP, Chinese brands have yet to prove that they could be cheaper while meeting all relevant regulations.

These numbers aren't final, besides you need to wait until they have all their cards on the table before you know if they will be competitive.

With the safety and durability performance that Chinese can only dream of.

The same dream that Huyndai and KiA once had when they were in their infancy. Yeah, you right, situations were different back then...bla..bla... Seeing is believing brother, if you had seen one yourself you would be more qualified to make comments.

Your competition doesn't stand still. What was a competitive car two years ago may not be competitive today and require a redesign.

Accord & Camery get redesigned every 4 yrs. If you market your product right, especially in the low end you don't have to dance with your competitors.




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