Re: China threatens 'nuclear option' of dollar sales

On Sat, 11 Aug 2007 01:56:39 GMT, Tankfixer <paul.carrier@xxxxxxxxx>
wrote:

No, a poor US will cause people to buy MORE Chinese products,
and even damage you own (car) industry more.

I would urge you to look into the US auto industry more..


Your nightmare is happening sooner than even I tought. Do a google
for similar stories. Include 2007 in you search terms.

1. Chrysler-Chery alliance to be finalized in Beijing tomorrow
Posted Jul 3rd 2007 8:02PM by Sebastian Blanco
http://www.autobloggreen.com/2007/07/03/chrysler-chery-alliance-to-be-finalized-in-beijing-tomorrow/

The long-awaited merger between Chrysler and Chinese automaker Chery
will be finalized in Beijing tomorrow, Reuters is reporting. The deal
floated in and out of the news as Chrysler was sold to Cerberus
Capital Management by DaimlerChrysler AG, but now that's everything is
about to be squared away, the importation of China-built vehicles to
the U.S. will be that much closer to reality.

The car that's gotten the most coverage here on ABG from this alliance
is the forthcoming Dodge Hornet, but it's likely that the Hornet is
destined for Europe instead of the U.S. The Hornet is part of
Chrysler's 3-year, $3-billion product renewal program, and if you'd
like to see a Chrysler-branded car like this in the U.S., now's the
time to start hopin'.

Chrysler spokesman Mike Aberlich told Reuters that the deal that will
be signed tomorrow is a general one, and that contracts for particular
vehicles will be dealt with individually.


2. A Chinese Chevy?

Experts say Chinese auto exports, with major Western brands, will
eventually hit U.S. market.
July 7, 2004: 3:35 PM EDT
http://money.cnn.com/2004/07/07/news/international/china_auto_exports/index.htm


NEW YORK (CNN/Money) - Clothes. Computers. Will cars be the next big
Chinese import in the United States?


The Buick Sail rolls of a production line of a GM joint venture in
China. (pix)
Experts say yes, it's inevitable that Chinese cars will eventually be
a major force in the U.S. and other developed markets. But they say
that while the cars will be made in China, they will likely carry very
familiar Western brand names like Chevrolet, Honda and Volkswagen.

"If you look at mistakes they (U.S. automakers) made with the Japanese
automakers, they missed their opportunity to partner with and be a
controlling force behind Toyota and Nissan," said Denton Dance,
director, emerging markets forecasts for J.D. Powers & Associates.
"The global Big Eight are not going to sit by the side and let
something big come into their home markets from China without being a
part of it."

The major U.S. automakers such as General Motors Corp. deny they have
any plans to sell vehicles now being built at their joint venture
plants in China back in the United States. They say strong demand for
autos in the Chinese market is swallowing up all Chinese production,
and more.

"We're struggling to keep up with demand there," said General Motors
Corp. spokesman Jerry Dubrowski.

Experts agree the growing Chinese market will delay any meaningful
Chinese auto imports here. But they say the flood of investment by the
Western automakers' new Chinese plants could create excess capacity in
the coming decade, and create an incentive for exports, likely
sometime in the next decade. Dance sees Chinese-made cars hitting the
U.S. market 15 or more years down the road.

"They're going to do it (export cars to the United States)
eventually," said Gary Silberg, partner with auditing firm KPMG's auto
practice. "Their advantage will clearly be on the smaller, low-end
cars."

Silberg and other industry experts say the agreements between the
major global manufacturers and the largest Chinese automakers may stop
the Chinese from ever having direct sales into the U.S. market.

"I don't see much advantage of them setting up a complete new network
to sell the product in competition with their partners," said Max
Pemberton, author of a recent study on the Chinese auto industry for
London-based auto research firm Autelligence.

One U.S. auto industry executive, who spoke on condition that his name
not be used, said that while he agrees the Big Three U.S. automakers
don't have any immediate plans to sell their Chinese vehicles back
here, that kind of export could make sense down the road.

"When it makes economic sense, it will happen," said the executive.
"Every year the auto industry takes on a more global look.
Manufacturers are going to go where they can produce quality vehicles
most efficiently."


Industry experts point out that U.S. automakers have had trouble
producing the low-price compact cars cheap enough to make money on
them in the U.S. market. China, with state-of-the-art technology in
its new plans and low labor costs, could allow the Big Three to
compete more efficiently in that market, they say.

In January GM started to import its new compact car, the Aveo, that is
being built in Korea by GM-Daewoo Auto and Technology Co., the joint
venture formed after GM purchased the bankrupt automaker there. It has
sold about 21,000 of the vehicles in its first six months in
showrooms. Dubrowski said that unlike GM's Chinese investments,
GM-Daewoo is being set up primarily to serve the export market,
including shipments to China.

Coming to a dealership (not so) near you
The low price for Chinese cars is what Arizona businessman David
Silburg said is leading him to try to import Chinese cars to the
United States as soon as the end of this year. He is selling
dealerships in his company, China Motor Corp., to sell cars from three
different Chinese manufacturers.


"The price is what's going to do it," said Silburg. "People see these
vehicles and they can't believe it -- it looks like a baby Mercedes
with a $9,000 price tag."

But J.D. Powers' Dance said the manufacturers that Silburg is trying
to bring in are the smaller Chinese automakers that don't have joint
ventures with Western automakers. He said that while the quality of
the Chinese-western joint venture autos is quite good, the quality of
the regional Chinese automakers is significantly worse than U.S. or
Japanese vehicles.


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