Wednesday, December 10, 2008

Detroit moves to China

DeepLode has posted before on the benefits to China of the demise of Detroit. The American car industry is regretting its gung ho entry into Joint Ventures with the Chinese government for production in China.
They have handed China a bargain.
The Big Three car makers, namely GM, Ford and Chrysler all have joint ventures in China and sell over a million vehicles annually in China and surely see China and Asia as its most important emerging market.
The Chinese market has been profitable.
And will continue to be so.
Ford is making a profit in China
G.M. is making a profit in China and is capital positive.
All joint ventures of Ford are making a profit.
Chrysler sales in China increased 217 percent in the first ten months of this year. The company is going to introduce two new models next year.
The U.S. auto industry crisis is an enormous opportunity for the Chinese Auto industry to steal a march on the U.S. And remember that these are formal Joint Ventures which give the Chinese partners (ie the Government ) control.
The current rescue plan before the U.S. Congress is political not economic.
The car industry has already been moved to China by the same industry decision makers who are now cap in hand in Washington. The transition is on.Production will go to China. The big three have signed the contracts.

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