The world's carmakers are struggling to compete with China
(www.bbc.com)
from return2ozma@lemmy.world to world@lemmy.world on 31 May 02:11
https://lemmy.world/post/47560553
from return2ozma@lemmy.world to world@lemmy.world on 31 May 02:11
https://lemmy.world/post/47560553
#world
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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.
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.
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 🤔
It probably has more to do with the cost of labour in China.
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. 🤷♂️
Apart from not being true, that doesn’t even make grammatical or mathematical sense 😄
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.
True.
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.
Europe and the US generally pay subsidies for EV purchases, not production.
If you buy a Chinese EV in most countries with an EV subsidy, you get two subsidies: the Chinese one for production and the local one for purchasing.
That’s kind of the point though, no?
Why aren’t US or other non-chinese car makers making more electric cars to compete?
Instead they take oil money to keep combustion engines around as the primary. Despite companies like Ford having been subsidised by the government to still exist with no real requirements.
Most countries have come all the told it needed to be able to do this and refused to adapt at the same time.
I’m the end it’s a race for the bottom which just sucks…
Most countries don’t subsidise goods sold into other countries. It’s literal economic warfare.
Most companies also have plenty of EV offerings. They’re just not as popular as ICE counterparts yet.
USA did the exact same thing with Tesla.
If I go buy a Tesla right now in Estonia, the US government isn’t paying Tesla extra for building the car, despite the fact that Musk was literally president of the united states a year ago. If I buy a Mercedes, Germany won’t pay the company to build the car. If I buy a BYD, the Chinese government will pay BYD.
Tesla received tax benefits and grants for building factories, but that’s normal, the Chinese do that too. Nobody’s complaining about that. It’s the fact that they literally still pay per car built, even if the cars are sold to other countries, long after the companies are successful.
Then there’s the working hours. 996 is technically illegal now, but plenty of Chinese companies still do it. There was another comment somewhere in this thread where a person said they thought Chinese factory employees have good living conditions, as he’d done the job for a few months and didn’t have any issues affording things. When asked how much they had to work? 84 hours. That’s worse than 996, which is “only” 72 hours.
🤡🪙
Good comeback 🙄
No point saying anything else, and you know that.
Sure, can’t just admit you were wrong like a big boy/girl/other. That’s obviously beyond your capabilities.
I’m not wrong because you typed words. You “but” capitalism. I don’t. You simp for capitalism when you personally like it. That’s pathetic.
Wow, that’s what you took from it? That I like capitalism? To the point of simping for it?
You must be even more dense than I thought 😄
When a dense person thinks I’m dense. 🤣🤡🪙
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. thecarexpert.co.uk/which-new-cars-are-built-in-ch…
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.
aiu.edu/…/the-myth-of-cheap-chinese-labor-unpacki…
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.
<img alt="" src="https://lemmy.ca/pictrs/image/e57cd1ed-9260-472d-b92b-fa7148561237.png">
www.thecrimson.com/…/harvard-grade-cap-data/
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.
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.
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.
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 😮💨
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.
What? Rubbish. Total incomprehensible rubbish.
Right, time to get the coal burning in my steam tractor!!
oh, mister fancy with his coal tractor. Whale oil too good for you?
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
youtu.be/UhhZu0ZHdw4
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.
They go for next quarter profits instead of value for consumers . Stopped building affordable cars favoring trucks. Shipped car industry to China. The end
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.
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.
How many hours is that about? They don’t have 40 hr limit? How about work safety and health insurance? Free healthcare right?
That was 14 hours a day 6 days a week. It was non specialized jobs mostly filled by people getting their first job moving from the farms to the cities. Many people changed job within the first year. 40 hours work weeks were available. Regarding work safety, factories I visited were quite good, modern equipment and practices. I have seen machinery being used quite commonly which would elsewhere be considered highly specialized. Not sure about free healthcare, I did not get to need the hospital.
I’m not saying it’s the best country in the world, but in general the people I met were happy and enjoyed a good life without many problems.
China has universal healthcare, at many tiers from zero to half co-pay.
Pension Insurance: Provides retirement benefits after a required number of contribution years (typically 15 accumulative years).
Medical Insurance: Covers healthcare costs. In many cities, this is combined with Maternity Insurance.
Work-Related Injury Insurance (Workers’ Compensation): Covers medical expenses, rehabilitation, and disability compensation for occupational illnesses or workplace accidents.
Unemployment Insurance: Provides financial support if you are laid off.
Housing Provident Fund (HPF): A mandatory savings account where both the employer and employee contribute, which can be withdrawn for housing-related expenses like buying or renting a home.
Ew that sounds like the American system. Disgusting.
look at the squalor!
<img alt="" src="https://lemmy.ca/pictrs/image/76c8d3f8-1a16-4768-8137-2c4ffeb38825.png">
Yes, surely the manufacturing plant employees live in downtown high-rise buildings next to a beautiful park.
Do you want me to post a photo of Central Park or Times Square? That certainly shows how the American manufacturing employees live.
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 .
journal-neo.su/…/from-vladivostok-to-lisbon-a-cou…
Yea sorry, most of us don’t want to live under Russian rule.
I don’t think there was a rule in that partnership. And look at it - eu industry is fucking dead.
Lisbon to Vladivostok is a Russian ambition for sure, but not one of partnership lmao, it’s an imperial ambition going back to the actual Russian Empire.
ChatGPT says 10-15% of the cost of a typical car is labor
So that would give Chinese manufactured vehicles a 6-10% price advantage
We wish
Okay, now add the labour of every other step of the process too. The 15% is at VW’s own factory. But they buy parts from, among others, Bosch and ZF who also have employees producing the parts.
Then also add the labour costs for R&D. BYD’s average employee salary in China, including everyone from manufacturing to design to engineering to leadership, was less than half of what the manufacturing plant employees make at VW’s German plants and still significantly less than the Bratislava plant. Only top level leadership at BYD gets high salaries.
Which is why VW has been fighting the IG Metall union for the right to close down plants they can’t afford to run because their cars aren’t expensive enough to be profitable at these labour costs.
It’s gonna suck for everyone involved, but that’s just what you have to accept if the biggest economy in the world has both super cheap labour AND manufacturing subsidies. It’s game over for everyone else unless people are willing to take a major pay cut.
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.
It’s a normal tactic
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.
www.gtai.de/en/…/incentive-programs-in-germany
bundesbank.de/…/2000-12-subsidy-trends-data.pdf
For the us, there was a combination of
See all that is being done in China too but it’s not even the issue. The issue is car manufacturers receiving a direct subsidy on all cars produced. Nobody does that and generally selling things for under cost long term is considered illegal because it’s a way to establish a monopoly in an established market.
And yet even if that were true, where is the economic policy targeting that? You don’t throw a tantrum and tariff the world, but could do something useful with targeted penalties on one hand and incentives for your own legacy manufacturers on the other. I could be convinced by that
But reality looks a lot more like fear and xenophobia
Well maybe neoliberalism was a bullshit economic theory all along and 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.
The industry already exists. It’s being juiced artificially so they could sell goods to other countries under cost.
Same money could be used for e.g healthcare. China has a pretty US style healthcare system, just a bit cheaper. Instead it’s being pumped into private companies that already have a cost advantage before said subsidy.
What they’re supporting as a nation is illegal in a lot of places, which is why they’re met with tariffs. Which, btw, China also does. They use tariffs too. Dumping is a means of establishing a monopoly.
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.
Went for trucks for greater profit margin and lower regulations but lost the volume game. For capitalists, they sure suck at it.
Then don’t. Make cities walkable and invest in public transport.
This would be ideal.
China is also doing that, believe it or not.
In my experience, the best we can do is change the bus schedules so you have to walk further to a bus stop and wait longer for a bus that never arrives at the scheduled time…
I don’t about the china and Europe already have a lot public infrastructure such as trains and walkable cities. We are behind there too
Alternate headline: “The World’s Carmakers Have Become Too Fat And Bloated To Compete With China”.
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
reuters.com/…/global-subsidies-rebound-especially…
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.
China funds all these companies and their projects, that’s why China is pushing forward.
So like you think us and Europe not prepping their manufacturing by combination of loans and tax breaks?
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”.
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.
Maybe they should try practical and repairaible cars for a change?
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.
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).
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.
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.
For that, we’d need younger, educated, critical thinkers to actually vote. Usually, the three of those factors don’t exist together. I think voter turnout for youth is still like 50% or less. I know the populist far-right party got some votes recently for being good at social media, different, and offering simple solutions (most of which were “foreigner bad!"), but it didn’t seem to translate as much in the last election making it seem like more of a protest vote if anything.
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???
You mean China has a comparative advantage? Maybe the West should make more port instead.
is there a tina from china community on here..
Cool. Let everyone buy them. Competition is good.
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.
<img alt="" src="https://lemmy.zip/pictrs/image/c7a14d73-cec1-4319-985e-178f8a66fd13.gif">
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.
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.