China's Cars

Traditionally, there have only been a handful of countries up for consideration when talking about the automobile industry. Japan has always been in the lead as far as vehicles manufactured and the United States second in those manufactured and purchased. The big European car producing countries rounded out the top five until recently. Long known as the leading country in the world when it comes to manufacturing everything from toys to women's pants, China is now making major strides in the automotive industry as well.

China recently surpassed Germany and became the third largest automobile manufacturing nation in the world. This has come about largely in part thanks to the exponential increase in China's middle class over the last decade. Cheap labour and a willing population has made China one of the world's most important industrial nations. While technology such as global SIM cards originate in countries like Switzerland or South Korea, it is generally China that the world turns to for the massive manufacture of these technologies.

The result has been a lot of employment in China. For the first time in the history of the nation, people have money, and they want the same goods to spend it on as middle classes in other countries. That means modes of personal transportation, and auto manufacturers in China are answering the call.

Currently, China has nine different domestic automotive companies. As is the case with all things in China, automotive production is strictly regulated, and these companies must produce and sell their products strictly within China. In addition, they have to develop their own parts and services entirely in country, so no foreign imports are allowed. Combined with a marked lack of customer service sense, this means that foreign automotive companies outside of China have little to fear from China's domestic companies.

Of course, current conditions certainly don't eliminate the threat of domination by Chinese automakers at some point in the future. After all, the country which helped to revolutionize the mass production of electronic design and manufacturing systems has enough experience to pose a threat once they work out the customer service kinks which help propel the auto industry elsewhere.

Domestic plants are not the only ones operating in the Chinese automotive industry. There are currently 13 other car manufacturers with operations in the nation. These include North American manufacturers Ford and GM. Part of the reason for our continent's woes (along with the bottoming out of the real estate market as indicated by signs all over such as the number of Arlington TX townhouses for sale) is the plummeting fortunes of these companies. It could be that having a solid footing in a country where sales can only increase in the next few years is what will keep these companies and their North American plants afloat until we get back on our feet.

Companies all over the world have begun to see China as the best hope for large profits for the future. This is true of industries from software development (ACCPAC, Vancouver developed accounting software, includes two Chinese versions in its offerings) to health technology. It's a hope that North American auto companies have bought into, although time has yet to tell if Chinese made models will pose the same threat to that sector as their Japanese counterparts.