The world's carmakers are struggling to compete with China
23 days ago by return2ozma to c/world
Our design engineering is lacking too. I read not long ago how the president of Ford said how they tore down a Chinese EV and said “we got it all wrong.” I’m in the automotive manufacturing industry and we source some parts from China. The factories I work with are all IATF/ISO certified and they can make parts for 10x less AND not require a minimum production that would last me 5 years. And the comment about working around the tariff is absolutely true. One of our Chinese suppliers started building a plant in Thailand not long after the election. State of the art. less tariff. Quality parts. My first order is shipping this week.
Chinese industry knows how to manufacture at scale. With a hundred year head start, US auto manufacturing is still a joke.
We didn't just outsource, and it wasn't cheap. We went in and built the industries and trained the people to make it happen. Apple Tesla and others. We built the capacity for massively competing industries overseas.
I mean, from what I can see half of them aren't even trying.
The world's car makers struggled to compete with Japan back in the '70s, but I would argue that struggle gave people access to better vehicles.
Turned out the winning move was to make affordable cars that were fuel efficient to operate and people would rush to buy them.
Japan even failed to learn from Japan judging by everything I see here. Not necessarily as badly as the US mfgs did, but still. Especially for those chasing hydrogen right now and Nissan going through its thing (and I drive a Nissan kei car).
Nissan/Honda/Toyota/Subaru have the worst EVs on the market. They learned nothing lol.
Bad screens, tiny screens, bad software, uncompetitive range, bad interior, zero competitive features above the competition.
Japan is an insular society that discourages talking out against your superiors in the work environment, so this was bound to happen in the days of the aging-out boomers holding onto leadership positions. With the head start that Japan had, they should’ve produced a 1:1 Tesla in 5 years, but they didn’t. It’s been 15 years since the best cars hit the market, and now China leapfrogged Tesla to be the best like Japan did to American car makers 40 years ago.
All of this was made possible by Chinese government cash infusions and social programs to invest in car manufacturing/ecosystems. The west did that in 2010, but let the companies spend the money how they wanted (the top executives were allowed to get away with embezzling all of it. surprise!) with no stipulations, and that’s how we got to where we are today.
Bad screens
I mostly like the screen in my Nissan (but it's a 2018ish one for the Japanese domestic market). The buttons for heat, etc. are still separate but, annoyingly, are flush with the panel and I have to take my eyes off the road to do anything (unlike my old '80s and '90s car where I could adjust anything by feel).
Japan is an insular society that discourages talking out against your superiors in the work environment
Since I see this come up a lot, I will say that this part is changing. Not everywhere and it's still delicate, but it's not like it used to be.
I want to buy an EV (unless things in Japan get worse and I have to move around the world again), but I'm not holding out hope that it will be a Japanese domestic one. It sure as hell won't be a tesla. I'm not sure that will leave a lot when it comes time to buy. However not buying anything domestic leads to all sorts of issues when it comes to maintenance, service, and repairs.
Since I see this come up a lot, I will say that this part is changing. Not everywhere and it's still delicate, but it's not like it used to be.
I’m so glad, because it kills me to see Japan go so far downhill socially and economically. Tokyo should be the NYC of the far east.
But that requires R&D, and that means hiring and paying more engineers! And maintaining multiple production lines! And paying people to work on those! Can't we just make a law that all Americans have to buy an F-150 by the time they turn 30???
This is my take too.
It's not that America and Europe can't compete. It's that they've got their fat asses propped up on piles of misbegotten cash and are too fucking lazy and greedy to make a good product.
And massive subsidies China gives its industries to dump global markets and take control afterwards
Every country subsidizes their industries. The US automakers have gotten tens of billions in bailouts whenever they trip on their face, plus decades of tariffs against cars made outside the US so they play safe in their home market.
The difference is that the Chinese had a strategy of developing the industry rather than supporting the companies (and allowing them to steal the money). Looks like the bet they made has paid off. It will be years and a complete corporate rethink to get out of this black swan moment.
I wonder if the fact that most American and European carmakers are stubbornly clinging to the 1800s technology known as the internal combustion engine while Chinese ones are actively embracing the modern technology that car buyers actually want has anything to do with it 🤔
oh, mister fancy with his coal tractor. Whale oil too good for you?
That's another part of it, sure, but DEFINITELY not the whole or even main reason.
Mostly the main reason. That and state subsidies to kill the foreign car market with long term goals. Someone always suffers with capitalism. Even state capitalism. 🤷♂️
Mostly the main reason
Apart from not being true, that doesn't even make grammatical or mathematical sense 😄
That and state subsidies to kill the foreign car market with long term goals
Except that goes both ways, with Europe and the US subsidizing their automakers and disadvantaging the Chinese ones just as much if not even more.
Someone always suffers with capitalism.
True.
Even state capitalism
Also true, although protectionism ≠ state capitalism.
Capitalism is a philosophy/ideology where the maximum accumulation of capital possible is held up as the main goal of existence.
Protectionism DOESN'T maximize the capital of the state, or the majority of the people residing in it, only the companies benefitting from it and the politicians they bribe.
Throwing more people at a design problem doesn't often actually improve the rate of solving it.
Many brands are assembling their cars in China. https://www.thecarexpert.co.uk/...
Yes, because western employees like getting paid and working 40 hour weeks. Only way to be competitive is to start treating western employees like shit (unions won't allow) or shifting manufacturing to China.
And also the fact that they control all the resources (like rare earth minerals) needed to make EV batteries while every other manufacturer is forced to buy them at a markup from China. They even have their own slave labor force to work the mines so that they can keep prices low for themselves.
The belief that China relies on universally "cheap" labor is largely a myth. While wages were incredibly low during the late 20th century, decades of economic development, rapid wage growth, and high productivity have transformed the country into an advanced manufacturing hub rather than simply a low-cost production center.
This is being fueled by a strong STEM educations system, whereas US education has been degrading since the 60s and university standards are a joke.
Yes, the super high wages in China have gotten to a point where BYD's average employee in China (that includes everything from manufacturing to top level leadership) makes about a third of what a manufacturing employee in the IG Metall union makes in Germany.
It's like I keep saying. If the west wants to even dream of being competitive with Chinese manufacturers, unions need to go bye-bye. Or we can tariff the subsidized + cheap labour cars.
European carmakers have dozens of EV models on the market, and they are dominating the EU market though selling poorly outside it.
While rapidly shrinking, the ICE market in the EU still accounts for about three quarters of the market. This is why some EU carmakers (notably Stellantis) have shifted to a Kodak strategy in an attempt to make short-term gains over the coming decade.
European carmakers have dozens of EV models
Yes, but they make many times more ICE ones than that, despite the fact that consumers generally prefer EVs as long as the price is right.
and they are dominating the EU market though selling poorly outside it.
That's probably heavily influenced by national and EU subsidies and other regulations designed to give them significant advantages over non-European competitors, rather than what European drivers want.
the ICE market in the EU still accounts for about three quarters of the market
Because of the aforementioned stubbornness and preferential treatment more than anything else.
The EU was going to ban new ICE cars by 2030, before lobbying from the major car making countries succeeded in pushing it back to 2040. I just hope they won't succeed in their current efforts to push it back even farther if not repeal the regulation entirely 😮💨
European carmakers have dozens of EV models on the market, and they are dominating the EU market
Yet the north American manufacturers have (at best) only 1 or 2 models of EV available, and those are priced in their luxury range, then they complain that nobody wants to buy EVs, so they double down on massive SUVs and unnecessary pickups.
Then don't. Make cities walkable and invest in public transport.
China is also doing that, believe it or not.
This would be ideal.
They go for next quarter profits instead of value for consumers . Stopped building affordable cars favoring trucks. Shipped car industry to China. The end
Went for trucks for greater profit margin and lower regulations but lost the volume game. For capitalists, they sure suck at it.
Even if you ignore the US obsession with trucks, western manufacturers labour costs are much higher and there aren't subsidies on manufacturing EVs, only buying them. Chinese EVs get manufacturing subsidies and then in many countries they also get a local subsidy at the point of purchase. It's an underhanded tactic, the Chinese government is essentially paying people outside of China to buy Chinese EVs so western competiton would die.
US car makers get tax incentives and bailouts, effectively subsidized by the government as well.
The US government doesn't pay Ford to make me, an Estonian, a car so I wouldn't want to buy a Volkswagen.
That's what china does.
Edit: Loving the downvotes.
The Chinese companies get all the same tax incentives, bailouts and R&D grants that western manufacturers do. They're eligible for the same purchase subsidies that western EVs are. They're just also subsidized as a means of economic warfare against western vehicle manufacturers.
they have all the manufacturing there, I'm sure all the parts are dirt cheap for them if you don't ship em cross ocean.
I'm not sure about china paying for you to buy them, many countries counter that with tariffs. I think those prices are close to natural prices given the enormous scale of china and nearby markets.
Yes, the tariffs counter the artificially low price. At least on the more expensive models, as tariffs aren't a flat fee per car like the subsidies. You're then still left with a workforce that's paid about a third if not a quarter of what they'd be paid in some European countries that manufacture cars.
If we really wanted European EVs to be competitive with Chinese, unions need to be abolished and wages lowered. Unfortunately, we ALSO want people to have good living conditions, so that's sort of a no-go.
Are you implying Chinese people do not have good living conditions?
I have been in China only a few months working on the assembly line. Work was long and tough, but the pay was good and they'd give you free housing and food. Plenty other workplaces were available if you wanted to work less hours.
ChatGPT says 10-15% of the cost of a typical car is labor
a workforce that’s paid about a third
So that would give Chinese manufactured vehicles a 6-10% price advantage
We wish
Eu should have taken on Putin's offer while it was being offered - Europe from Lisbon till Vladivostok. Free energy in exchange for technology. Is my opinion. And now it's just too late for both. China is one global winner in all areas .
Then why does nobody else do it? Why doesn't Germany pay their manufacturers for every car built?
Nobody except for the world's biggest economy can afford to literally subsidize manufacturing of luxury goods for overseas markets.
For the us, there was a combination of
- lots of research support
- loans and grants to retool factories
- developing a stable market through consumer incentives
- growing the market by investing in high speed charging along highways
Chinese EVs get manufacturing subsidies
US federal government spent $85B on US automakers since 2008. State governments more billions. Where's the cheap cars?
The US isn't paying for every car manufactured. The Chinese government has also spent tens of billions in R&D grants and such, we're not even talking about that, we're talking about the simple fact here that if I buy a Chinese EV, China is essentially paying me to do it (or rather, paying their manufacturers to build them), PER car. Not some lump sump investment into their manufacturing years ago.
The US isn't paying their manufacturers every time a new EV rolls off the line destined for another country.
Well maybe neoliberalism was a bullshit economic theory all along and state intervention is actually superior.
state intervention is actually superior
For every EV built, Chinese government pays the manufacturer, but it's not exclusive to EVs built for the domestic market. It's EVs built for any market.
That's tens or hundreds of billions each year that the Chinese government could spend on its own people, but instead spends on trying to make western car companies bankrupt.
Is it actually better in some way for Chinese people in their day to day lives if non-Chinese people to get cheaper cars, or is that modern day colonialism, trying to gain more resources in the long term at the expense of people living in other countries?
OK, look buddy, I'm really not a fan of genocidal anti-democratic autocracies, but with your silly arguments you're making me argue for them. Yes, it's good for the average Chinese person. The average Chinese person gets a fucking national heavy industry, with millions of jobs in manufacturing, R&D, services etc. Are we really going to pretend here that does not benefit Chinese workers?
And are we really going to be shedding crocodile tears that it's somehow unfair to us in the West when we have been glazing billionnaire's dicks for the last 40 years of the neoliberal era? We have built an economy on neoliberal fantasies of trickle down economics, we empowered money hoarders to do financial speculation and all it got us is the 2008 meltdown when even fucking Ayn-Rand-fuckboy Alan Greenspan admitted he had the model wrong.
And since 2008, we have concentrated insane wealth in fucking insane billionnaire hoards while our societies suffer under austerity, with no investments in actually meaningful education, in industry, in research beyond bullshit bubble schemes like AI. And now we cry for "colonialism"? Give me a break. Give me a fucking break. We cut our own dicks with fifteen years of austerity and under-investment. And now that the Chinese learned our game and are beating us in our own fucking game, we cry "colonialism"? Colonialism doesn't get anywhere near to what they're doing. Colonialism is what we've been fucking doing for 200 years to the entire Western Hemisphere and Africa. Now we cry "colonialism" when we don't have the fucking balls to build an economy that's not predicated on sucking capitalist dick? Give me a break.
Maybe they should try practical and repairaible cars for a change?
Think U.S. car manufacturers did a couple billion of of stock buybacks over the last few years. If only they had invested that money back into the business to make better vehicles.
Short term profit and doing compliance cars and half assed attempts with certain irrelevance in a decade or so, or choosing to forgo profit and really go for converting to EV.
Every board room figuring a golden parachute in 10 years sounds really good.
You mean China has a comparative advantage? Maybe the West should make more port instead.
They don't even need cars to do it. The BBSHD kit from Bafang I'm gonna throw on the bike I'm building will save me thousands of miles on my existing car.
China is keeping me from buying a new car by helping not need to use one.
For years it was all about cheap labour in China but what it really is about is innovation and robots. Western car makers have largely missed the warnings by assuming the Chinese market was like our own.
The other point is that capitalism has been whinging about market distortion while the Chinese government was planning for dominance.
- Lobby to become the default mode of transportation in the postwar period
- Get dragged kicking and screaming towards efficiency
- Successfully lobby to gut regulations and manufacture demand for SUVs and crew cab pickups
- Stop building cars altogether
- Help get a fascist elected who kicks off another oil crisis
- Cry about China eating your lunch
China funds all these companies and their projects, that's why China is pushing forward.
So you're saying that neoliberal "free market" economics doesn't work and that state intervention in the economy is actually superior. Maybe we should try that whole "socialism" thing in the West too. Let's even call it "socialism with Western characteristics".
Good, maybe it'll stir them from their oligopolist stupor.
The days of fat, dumb and happy are gone. The options are to get tough or to get driven out of business.
I'm partial to this explanation, what do you people think? I'm not an expert
Summary: Western car makers don't make cars, they assemble cars from parts they buy. Their business is procurement and they don't engineer the car from the ground up to meet a product vision. Rather, they're trying to make something from the same old parts and suppliers of the internal combustion engine times.
It's "nobody gets fired for buying IBM" but for cars
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Who could have ever foreseen this result when we outsourced all of our manufacturing and skilled labour to China???
It's almost like chasing thoughtless, short-term profit gains is a horrible idea.
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