Americans Are Open to Cheap Chinese Cars. That's Scary for the Auto Industry
insideevs.com
insideevs.com
US consumers are the ones who ultimately pay the cost of tariffs.
Once you receive the bill from US customs for tariffs due and you are writing the check, it becomes painfully obvious that Americans are footing the bill and it is not just "free market ideology".
Refined Petroleum ($138B)
Crude Petroleum ($118B)
Petroleum Gas ($116B)
Cars ($57.5B)
Integrated Circuits ($49.8B)
Some amount of that refined and crude petroleum isn't destined for automotive gas, but I'd be a fair fraction of it is.(couldn't find a by-product breakout on https://www.bea.gov after a bit of digging on so I'm using https://oec.world/en/profile/country/usa and relying on lazyweb for double checking)
This is a distinction that has lost much it's meaning.
Final assembly of these vehicles is done in Canada, Mexico and the USA.
Regardless of the final assembly point, the powertrain (engine and transmission) is likely to have been built at the GM plant in Silao, Mexico.
https://www.motorbiscuit.com/1-full-size-american-pickup-tru...
Bottom line --- the typical consumer really has no idea what he is getting when he buys "American". The people selling it typically don't really know either but they will gladly tell you whatever they think you want to hear.
The Monroney Sticker that is on the vehicle lists the following:
US/Canadian parts content (by percentage)
Other countries that are major sources of parts content (by percentage)
Final Assembly Point (City/State/Country)
Country of Origin for the engine
Country of Origin for the transmission
For example, in 2023 Ford averaged 52% "American" content while Honda averaged 67%.
Which is more "American" --- a Ford Ranger or a Toyota Tacoma? (Hint: Monroney says it's not the one most people would guess.)
At this point, just about every auto manufacturer that sells vehicles in the US is a multinational corporation with huge operations in dozens of countries. It's all a branding exercise now.
BTW - Honda of America does so much work in Ohio that they could probably completely cut ties with Honda in Japan.
Thank you for finally agreeing with my original premise.
I'm just pointing out that regardless of branding, the quality of the products is (1) not equal, (2) still correlated with where the vehicle is assembled.
https://mexicobusiness.news/finance/news/soaring-chinese-car...
For consumers, the most significant difference between an "American" car built in Mexico and a "Chinese" car built in Mexico may be the price and how much extra they're willing to pay just to hate on China.
"American" manufacturers obviously have no problem sourcing parts (and labor) from China. Why should "American" consumers?
Because at least presumably, the American companies sourcing parts and labor are overseeing the final product. A lot of products are made in China, sold at Target or Best Buy, and quite good.
Whereas if you buy some "random China" toodad off of Alibaba or Wish, who knows what you're getting.
To put a finer point on it, would you trust Random Chinese Business to definitely install airbags correctly without Ford or Toyota looking over their shoulder? I doubt you would.
It's not a hating on China thing so much as it's an acknowledgement of the fact that domestic Chinese brands generally tend to make absolute garbage.
The reason that half the cars now sold in America are "foreign" brands is because American companies proved less than adequate at "overseeing the final product".
I totally would. Perhaps even better. Like I trust DJI for drones and gimbals and other brands that got better than their US counterparts. It's about brand trust, and a Chinese brand can totally get that, it's not about some unsurmountable China vs US gap.
Not to mention the same argument you made was made in the 70s for Toyota too - "can't trust those Japanese cars, they're inferior". We know what happened next.
Besides, Ford as some paragon of quality control, seriously?
The only domestic Chinese brands "making absolute garbage" are those making cheapo garbage for "dollar store" like consumption. It's the price group that determines the garbage, not lack of Chinese oversight.
Not to mention a lot of US branded stuff (e.g. in computer peripherals) is just rebranded Chinese OEM stuff - selling for 5x to 10x the original price with the same internals.
I'm not saying this from the aspect of "chinese cars are bad" or whatever. Like the Japanese ones did before, they too getting on par and better. So consumers would be fine with either.
I said it from the perspective of losing national competence, infrastructure, and readily available trained people to work it (like it happened with other areas of manufacturing) and getting to play catchup later. American consumers sourcing parts or whole items from other countries will find they're also giving their manufacturing jobs to those countries (and creating a big working class/lower middle class issue), that those countries can then compete globally and replace their own brands, and so on. Later they can find that relying on outsourcing parts means they have not kept up with manufacturing infrastructure domestically, they don't have as many training operators available, and its a difficult race to get back on track when they decide to step it up again (like with the chips industry).
Well, at least we have lots of really bright people on HN. So someone here can probably figure it out.