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China car exports may begin small, but can't be ignored



Published: Wed, July 20, 2005 @ 12:00 a.m.



Some of China's automakers are setting their sights on the U.S. market, which is not a cause for panic but certainly is cause for concern.

The first two companies to announce their plans to invade the U.S. market are very small players, even in the Chinese domestic market -- which is dominated by established American, European and Asian car makers that have plants in China.

A recent Associated Press story talked about the plans of Geely Group and Chery Automotive to bring Chinese cars to American showrooms.

Geely talked in terms of selling thousands of cars in the United States; Chery is shooting for sales in the millions. Reaching either goal would be a long-term accomplishment for either company, given that their combined annual production today totals fewer cars than the Lordstown plant turns out.

Geely's two mainland Chinese auto companies -- Zhejiang Geely Automobile Co. and Shanghai Maple Guorun Automobile -- sold 96,683 sedans in 2004, up 27 percent from 2003.

Chery only made 80,000 cars and exported about 10,000 last year, mainly to developing markets.

By comparison, General Motors expects to sell about 225,000 Lordstown-built Cobalts this year.

Obviously, Geely and Chery have a long way to go before they emerge as rivals to GM, Ford, and Daimler-Chrysler.

But the automobile business is a worldwide business, with major and minor companies producing cars for domestic consumption and export on six of the seven continents.

The strength and success of automakers must be maintained over decades, not years.

Projected growth

Industry projections today show China's auto production doubling over the next six years, while that of Japan and the United States stay relatively flat. By 2011, according to Detroit-based CSM Worldwide, China will be producing 8 million cars, Japan nearly 10 million and the United States just over 12 million.

Anyone in Ohio or Michigan who doesn't see a long-term threat in those numbers has never driven passed a closed fabric mill in North Carolina. American textile jobs numbered 1.6 million as recently as 1994. In a little over a decade more than 900,000 of those jobs were lost -- the largest part to China -- and there is no telling how many of the 677,000 remaining U.S. jobs will be lost over the next decade.

Now is the time for the administration and Congress to begin thinking about the looming threat a doubling of Chinese auto production represents to the United States. It may be too late to save domestic production of textiles and electronics, but it is vital to preserve our steel, auto, truck and heavy machinery industries.




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