Here is a startling
tidbit; an urgent wake-up call, really:
Week has just reported that GM sold more than 2 million cars
in China for the second straight year in a row 2.35 million
this year and now sells more cars in China than it does in
the United States.
Sales of Cadillacs
in China are up a staggering 73 percent; sales of Buicks are up
24 percent and sales of Chevrolets are up 18 percent.
GM is also
reportedly getting ready to launch a $4,000 price-buster (in China)
and company spokesmen say that GMs near-term goal is to have
75 percent of its sales outside the United States.
Your tax dollars
And, a canary
in the coal mine.
China and India
are the future; we are the past. GM is moving to where the money
is, and that aint here.
States has arrived at the same point that now not-so-great Great
Britain found itself occupying after the end of WWII: A bankrupted
and exhausted imperially overstretched power that no longer had
the will or even the capacity to keep up with the emerging colossus
across the Atlantic, which was devoted to commerce primarily
not wars (and empire) the world over.
colossus is across the Pacific, but the essentials are the same.
In China, it
encourages business rather than taking pleasure in throttling it,
as is the case in the United States. The automakers are largely
free to build cars, as automakers were once largely free to do here
but arent anymore. The Chinese only possess one aircraft
carrier, not a fleet of them despite having four times our
In China, you
do not have to buckle up for safety and you can
ride a bicycle without a helmet, legally.
The sad truth
is that communist China is a freer place in many respects
than the U.S. both for individuals and for businesses. It
is why the Chinese middle class is growing while our middle class
is shrinking and why China is literally rolling in cash,
with an export-driven economy, while we are not just broke but massively
in debt and import almost everything except Internet pornography
and professional sports.
All the while,
American taxpayers an ever dwindling group are forced
at gunpoint to provide the capital which GM uses to build its business
in China (and India and elsewhere) but what do we get in return
except the bill?
the inside skinny: GM knows the United States is a dying market
for new cars mainly because Americans are increasingly no
longer in a position to buy them. And they are no longer in a position
to buy them because they have become so expensive (an average mid-sized
family sedan such as the Toyota Camry or Chevy Malibu typically
sells for around $25,000). And they have become so expensive because
of the endless conveyor belt of new diktats issuing forth from the
DOT and EPA in Washington. It also becoming cost-prohibitive to
manufacture anything in this country. Hence, almost nothing is in
fact made in this country anymore.
Until The Crash,
we were able to pretend we could afford all this and more via the
helpful hand of easy credit and by dipping into the bubble-financed
wealth of artificially (and temporarily) jacked-up real
estate values and 401k portfolios.
all gone and not likely to return.
But even as
the EKG goes flatline, the mandates continue to flow (most recently,
the congressional edict that all new cars average 50-plus mpg within
a few years irrespective of the cost).
GM knows theres
no future in this or here. And that is why it is shifting
its corporate gaze to greener pastures, like China, where it expects
it will be doing 75 percent of its business within just a few years.
sells many more Buick in China than it does in the United States.
In fact, Buick is the most popular nameplate in China.
really blame GM for this as galling as it may be to recall
that American taxpayers were forced to chuck over billions in bailout
loans money used to finance the move to those greener pastures,
and with it, the movement of all those manufacturing jobs to places
get the $4k car, either.
it would have a sticker price thats lower than the governments
loathsome cash for clunkers giveaway which forced
some taxpayers to subsidize the purchase of a new car by others.
Instead of ripping off one group of taxpayers to provide a government
giveaway to another set of taxpayers, GMs $4,000 car would
represent honest productive effort, free exchange goods produced
by a market that freely consents to buy them. People would get the
basic, inexpensive transportation that has largely disappeared from
the new car marketplace and which is desperately needed right
GM would make
money. People would save money. Capital would be built up
here rather than being exported over there.
What a concept.
of the $4k car, well just get the bill for it.
the Chinese colossus will continue to thrive at least, so
long as the Chinese are smart enough to not follow our example.
with permission from EricPetersAutos.com.
[send him mail] is an automotive
columnist and author of Automotive
Atrocities and Road Hogs (2011). Visit his
© 2011 Eric Peters
Best of Eric Peters