Chinese Automotive Performance & Policy

[AndreB]

Look at the X3 door panel compared to the previous model. It has straight edges and black plastic moulded lower door and cup holders and switches for windows/mirrors. Absence of metallic or wood trim and plastic light bar. Use of fabric for door panels.

I don't understand why BMW/Audi/MB make their new interiors so cheap when the Chinese are around the corner with higher quality interiors.

My friend wants to replace his old X3 with the new one but can't get past how cheap it looks, he's probably getting the X1.

 

[KiwiRob]

The HS9 isn't a pretty vehicle but it's interior quality shades anything for Europe in it's class. One of my daughters friends parents have 2 of them, the interior is a lot better than my iX. The rest of it isn't as good, but the interior is on another level.

 

[klier]

I don't understand why BMW/Audi/MB make their new interiors so cheap when the Chinese are around the corner with higher quality interiors.

The Chinese companies aren't real companies but government controlled divisions.
The Germans have actual shareholders who want high margins.

It's really quite simple. The playing field is not level. More like the Himalayas.

 

[AbsoluteUnit]

The Chinese companies aren't real companies but government controlled divisions.
The Germans have actual shareholders who want high margins.

It's really quite simple. The playing field is not level. More like the Himalayas.

Very much doubt that any of these Chinese companies are genuinely profitable.
We'll also see how long all of their cars last long term.

Particularly the electromechanical systems.

 

[klier]

Very much doubt that any of these Chinese companies are genuinely profitable.

Doesn't matter, they need the jobs for the people so they pour in whatever money is needed. God forbid you end up with riots against the government because of a crumbling economy and failing communist policies.

Particularly the electromechanical systems.

They just literally banned all cars with Chinese tech in the U.S and Canada. EU should take a good look and do exactly the same.

 

[SKY]

Very much doubt that any of these Chinese companies are genuinely profitable.
We'll also see how long all of their cars last long term.

Particularly the electromechanical systems.

We will see the real story if they actually end up dominating the field. That’s when their prices will start rising.

Let’s hope we don’t get to that point.

 

[Tuffode]

They just literally banned all cars with Chinese tech in the U.S and Canada. EU should take a good look and do exactly the same.

They haven't banned any cars with Chinese tech, they just proposed a ban. Big difference. We do have a 100% tariff on all Chinese built EV's though. The new Lotus SUV was going to start at 100k, but now it starts at about 200k due to the tariffs.

 

[klier]

They haven't banned any cars with Chinese tech, they just proposed a ban. Big difference.

Right, sorry about that.

 

[AndreB]

The Germans have actual shareholders who want high margins.

Let's hope the Germans are not the next Nokia, Philips, etc.
I don't mind their high margins but new cars are getting more expensive but look cheaper.
A nice X5 ends up over 100k euro because as standard it comes with plastic interior like a 1 series.

We'll also see how long all of their cars last long term.

Particularly the electromechanical systems.

My friend has two MG4's in his uber fleet, after 50k km zero issues.

 

[AbsoluteUnit]

Let's hope the Germans are not the next Nokia, Philips, etc.
I don't mind their high margins but new cars are getting more expensive but look cheaper.
A nice X5 ends up over 100k euro because as standard it comes with plastic interior like a 1 series.

Thing is, some of these Chinese manufacturers are selling at a loss.
Which means no manufacturer outside of China can compete with them without heavy tariffs.

My friend has two MG4's in his uber fleet, after 50k km zero issues.

That's good. We'll see long term over a larger sample, but that bodes well.
However, the MG4 is also cheap and not particularly luxurious, either.

 

[CrunchSlaughtered]

Thing is, some of these Chinese manufacturers are selling at a loss.

And how could you know this?

 

[KiwiRob]

And how could you know this?

He read someones rant on Facebook or watched it on YouTube. There are several Chinese car companies that have collapsed WM Motors, HiPhi, Levdeo, Evergrand...........

 

[klier]

He read someones rant on Facebook or watched it on YouTube.

Employing modern day slaves from the countryside is equal to selling at a loss. Of course no western company can compete with that.

Your social credit is in the plus though, the great defender of China from Norway. That's like all those Turks telling us how great Turkey is......from their Berlin appartment.

There are several Chinese car companies that have collapsed WM Motors, HiPhi, Levdeo, Evergrand...........

Not strange when you have 300+ car companies.

Anyways.....enough China for me for today. Carry on.

 

[AbsoluteUnit]

And how could you know this?

I don't know to be fair.
However, if a company with sales volumes as high as Tesla who entered the Car manufacturing space over a decade ago struggle to make a profit with massive tax credits from the US Govt, I struggle to see where profit would come from for the Chinese manufacturers. Certainly their labour costs are low, but that doesn't explain how they can produce EVs so cheaply.

More than happy to see a P&L statement and balance sheet to correct me if my supposition is incorrect.

 

[klier]

I don't know to be fair.
However, if a company with sales volumes as high as Tesla who entered the Car manufacturing space over a decade ago struggle to make a profit with massive tax credits from the US Govt, I struggle to see where profit would come from for the Chinese manufacturers. Certainly their labour costs are low, but that doesn't explain how they can produce EVs so cheaply.

More than happy to see a P&L statement and balance sheet to correct me if my supposition is incorrect.

Does pouring billions and billions and billions of goverment funding into these companies play a role perhaps?

 

[Matski]

As I'm sure I've said before, there's plenty of reasons to not want to do business with China, but some of these statements make no sense.

Many Chinese companies have shareholders and investors, they make money, and they pay dividends, they publish audited accounts, the same as western companies, you can buy shares in Li Auto (for example) as easily as you can BMW. Cost of labour/cost of living in the industrialised areas is 60-80% less, energy costs are about a third of Europe's in comparable areas, and they literally have a metric shit-tonne of resources within their borders, and to top it off, globally their currency is undervalued so they're fundamentally 'cheap' from a western perspective anyway.

Also, we shouldn't ignore the billions of tax payer's euros that European governments make available for business investment here all the time, or for example, the acts of tax-payer funded, state backed corporate welfare that were the bailout loans the US government made in order to protect American jobs. State assistance exists outside of China, simple as that.

On the topic of which, China's state socialism economic model (which isn't particularly communist) isn't particularly the problem, it's some of the less humanitarian policies of the authoritarian/totalitarian regime that are. Economic policy promoting domestic industry and export in order to provide jobs for the population is in itself, not a bad thing for China to do for the Chinese people - it's not something 'the west' should be raging about, but it seems the red scare is alive and well.

 

[Sunny]

You can't separate the authoritarianism from the financial/economic policy.

ps. I never understood this false equivalency/ self flagellation that so many in the west suffer from. Maybe cause I am not white/western origin.

 

[AndreB]

However, if a company with sales volumes as high as Tesla who entered the Car manufacturing space over a decade ago struggle to make a profit with massive tax credits from the US Govt, I struggle to see where profit would come from for the Chinese manufacturers. Certainly their labour costs are low, but that doesn't explain how they can produce EVs so cheaply.

Chinese Tesla's are better assembled than the ones built in US. iPhones are made in China not because of cheap labour but because they have to skills and tools to make them. Solar panels as well. The Chinese are able to build high quality products and cars too.

Cost of labour/cost of living in the industrialised areas is 60-80% less, energy costs are about a third of Europe's in comparable areas, and they literally have a metric shit-tonne of resources within their borders, and to top it off, globally their currency is undervalued so they're fundamentally 'cheap' from a western perspective anyway.

EU energy prices are high because of who?

 

[klier]

and they literally have a metric shit-tonne of resources within their borders

They are raiding Africa and South America for resources, so I doubt that's true.

You can't separate the authoritarianism from the financial/economic policy.

Exactly. It's utterly intertwined.

Chinese Tesla's are better assembled than the ones built in US. iPhones are made in China not because of cheap labour but because they have to skills and tools to make them. Solar panels as well. The Chinese are able to build high quality products and cars too.

Noty because of cheap labour? Is that a joke?
You are pretty much saying the Chinese have the skills others lack.

 

[AndreB]

You are pretty much saying the Chinese have the skills others lack.

Yeah, go read about Northvolt story here. They are almost bankrupt probably because they couldn't find cheap labour.

US was no. 1 in manufacturing solar panels which is mostly done by robots. Where are they now?