[Real_I_Hate_China]

http://www.forbes.com/markets/feeds/afx/2006/10/09/afx3075550.html

 

[Real_I_Hate_China]

The US politicians are not going to just watch and let their domestic industry get killed in the hands of foreigners. The only politically correct way of selling foreign vehicles in the US right now is via transplants(assembled in USA) or via FTA(Which China has no hope of signing with the US or EU).

The political tolerance limit is about 1 million vehicles per year from any one specific country. Germans export well below this number so they are safe from an auto trade dispute with the US, Japanese exceed this number so they assemble the majority of their cars in the US, and Koreans are approaching 1 million/year right now, so they are trying to overcome this issue via US transplants and an FTA.

Since the tolerated limit is 1 million vehicles from all Chinese brands(SAIC, Nanjing, Chery, Geely, Great Wall, Landwind, Brilliance and any other vender I forgot to mention), the slice of pie for each Chinese brand is rather small, unless they go transplanting.

 

[Real_I_Hate_China]

Who's to say they won't? (Transplant) Isn't MG already doing that?

Only a few thousand coupes only, that is that plant deal actually goes through. The rest of product will be shipped from China.

Having US transplants wipes out whatever the wage cost advantage that Chinese venders might have had, so it is not desirable at this stage. Transplants becomes viable only when the plant operater could extract a productivity of at least 100 cars/manyear, preferably 150.

GM USA is operating at 35 cars/manyear, and this is what got GM into trouble.

 

[Real_I_Hate_China]

1 million cars/year for all of Chinese assembled cars combined. That's like 155K vehicles/year each from China's aspiring 6 exporters. That slice goes down even further should Dodge Hornet is included in that number.

Trade policy makers look at the country of orgin when deciding on trading issues like these, not brands.