Soaring U.S. Car Prices Open Door to Low-Cost Chinese Imports

[Hamartia Antidote]

I remember the cars of the '70s. I was too young to have a license, but I did know how to drive. Back then, we owned cars because we had to, not because we wanted to, because all brands were so bad in terms of overall quality. Then it was compounded by the Saudi oil embargo which really did not affect total supply but that the oil company overreacted, so we ended up with gas lines. I can remember car ads that said 'Huge 2.2 L' engine. The American V8s were putting out barely 150 hp. It was a terrible couple decades for cars.

My mother's car was a gargantuan station wagon with the coolest back gate EVER.

 

[SaadH]

Mine is a '10 FJ Cruiser with 160K miles. It took me on streets, trails, and cross CONUS several times. And when I said cross CONUS, I mean Pacific to Atlantic and vice versa. When you buy a car, no matter what brand, you are immediately out of the car market for about five yrs. Maybe you are wealthy enough to buy a second car, but most people buy one. After five or more yrs and you need a new car, if the Toyota served you well, would you risk tens of thousands of $$ on another brand? Maybe. But for most people, not likely.

Toyota loyalists are not that way because there is a mystique about Toyota that they cannot live without. Except for the Cruiser, that is different. They are Toyota loyalists because they'd rather spend their money on something else instead of repair bills. So far, I have replaced on my Cruiser the air filter, oil, and shocks. Soon, it will be plugs. Then later I will change the oil in the manual transmission and the diffs. Even if the motor blows some time down the line, I would replace the motor than buy another car. There is no mystique about Toyota. The motor and transmission are over engineered and under powered for reliability and durability, and the customers' repeat money proved it.

It will take yrs for Chinese autos to prove themselves. And remember the Yugo.

It's not a matter of what any one individuals can afford. You can't fight the market forces.

Back in the 80's, 90's and early 2000's, Toyota and to some extent Honda provided what no other car makers, especially US manufacturers could provide, that is a decade long peace of mind after purchasing their cars, oil change and brakes were the only maintenance required. However, other automakers kept chipping away at their advantage and US automakers starting in the 2010's started to come close to them on reliability, my 2016 Mustang didn't give me any issues for the first 100K (until it was totaled in an accident), brakes, tires and oil change were my only maintenance on it.

With parity on reliability there was nothing that set Japanese cars apart and American cars were always, cheaper, bigger, faster and more fun to drive.

Japanese and especially Toyota were never convinced on the future of EV's and rightly so because hydrogen is more cleaner throughout the supply chain, however it lost out much like how Blue Ray lost out to DVD, inferior tech and quality gaining more traction by way of first to market. They missed the boat and finding it hard to pivot.

As for Chinese EV's having range issues. New Chinese models are soon coming to market with 600 mile range and with battery swap there is no range anxiety, furthermore, in 20-30 minute fast charging you can get 80% of the range.

All in all, Japanese and other legacy automakers' days are numbered, few will survive this disruption, only Ford has what it takes in the US, GM is struggling and the less said about Dodge the better.

 

[Communism]

It's not a matter of what any one individuals can afford. You can't fight the market forces.

Back in the 80's, 90's and early 2000's, Toyota and to some extent Honda provided what no other car makers, especially US manufacturers could provide, that is a decade long peace of mind after purchasing their cars, oil change and brakes were the only maintenance required. However, other automakers kept chipping away at their advantage and US automakers starting in the 2010's started to come close to them on reliability, my 2016 Mustang didn't give me any issues for the first 100K (until it was totaled in an accident), brakes, tires and oil change were my only maintenance on it.

With parity on reliability there was nothing that set Japanese cars apart and American cars were always, cheaper, bigger, faster and more fun to drive.

Japanese and especially Toyota were never convinced on the future of EV's and rightly so because hydrogen is more cleaner throughout the supply chain, however it lost out much like how Blue Ray lost out to DVD, inferior tech and quality gaining more traction by way of first to market. They missed the boat and finding it hard to pivot.

As for Chinese EV's having range issues. New Chinese models are soon coming to market with 600 mile range and with battery swap there is no range anxiety, furthermore, in 20-30 minute fast charging you can get 80% of the range.

All in all, Japanese and other legacy automakers' days are numbered, few will survive this disruption, only Ford has what it takes in the US, GM is struggling and the less said about Dodge the better.

And none of those long range EVs are cheaper than US EVs with the same range (after tariffs), so it's dead on arrival .

You are a weird one. No one trusts U.S. automakers to make a reliable car and they are still right to this day.

Lasting 100,000 miles without costly repairs is no longer an achievement, which is why the target nowadays is 150-200k miles without costly repairs.

Nearly all U.S. cars crap out between 100,000 to 150,000 miles and require very expensive repairs.

Since German cars ditched reliability a while ago the only choice left is North American manufactured cars from technically Japanese companies (mostly designed in the U.S. nowadays, go figure).


This is the best resource on car reliability on the internet currently.

Rankings - Dashboard Light

Used Car Paradise

www.dashboard-light.com

 

[Madni Bappa]

Soaring U.S. Car Prices Open Door to Low-Cost Chinese Imports​

You can buy a decent car in China for only about $14,000. That’s the retail price. So even with the U.S. 27.5% import tariff applied a Chinese car could be shipped to America and sold for less than $18,000. That’s 10 grand cheaper than the average used car.
John McElroy | Mar 02, 2022

Jolion hybrid among models produced for Great Wall Motors’ Haval brand.

We’ve never seen new-car prices jump as fast as they have in the past year. That’s leaving the door wide open for someone to swoop in and claim the bottom end of the market. And that “someone” could be the dozens and dozens of Chinese automakers looking for new markets to unload their excess manufacturing capacity.

I used to think the 27.5% U.S. import tariff on Chinese-made cars would protect the domestic market from those kinds of imports. Not anymore, I don’t. More on that in a minute.

New-car prices in the U.S. soared more than $6,000 last year to an average of $47,000, according to Kelley Blue Book. It’s the fastest increase we’ve ever seen. Tight inventory caused by a chip shortage, coupled with strong consumer demand, are what caused the price jump. But in this case, knowing the cause doesn’t fix the problem.

Historically it took about 24 weeks of income for the average American household to buy a new car. Right now, the average household income is about $67,000. So, the average household should be shopping for a $31,000 vehicle. Instead, most consumers are paying higher prices for the cars they want and are taking longer to pay off their loans. Ever wonder why 72-month or even 84-month car loans are becoming more common? Or that the average car is 12 years old? There’s your answer.

Because of rising car prices, fewer Americans can afford to buy a new car. Over the past 20 years the auto industry has pushed about 5 million households out of the new-car market and into the used-car market. And now, with extra-heavy demand for used cars, prices for them are going up just as fast as with new cars. Used-car prices last year jumped $6,000 to an average of about $28,000. And that is too much for a lot of people.

Meanwhile, the Chinese car market is saturated with too many car companies making too many cars. Some estimates put the overcapacity level in China at 20 million units. In response, China is rapidly ramping up its automotive exports to soak up that excess capacity.

Last year, China exported 2 million vehicles, double what it did in 2020. Those cars have been well received in markets such as South America, Africa and Southeast Asia. And you’ve got to believe that, at least for some of them, the U.S. market is next on their list.

You can buy a decent car in China for only about $14,000. That’s the retail price. So even with the U.S. 27.5% import tariff applied, a Chinese car could be shipped to America and sold for less than $18,000. That’s 10 grand cheaper than the average used car. They may not appeal to everybody, but inexpensive, brand-new cars are sure to find customers.

In the late 1960s and early 1970s, low-cost little Japanese cars found a foothold in the American market. Detroit ignored them because they collectively had less than 5% market share and didn’t seem to pose any threat to big, powerful American cars.

General Motors, Ford and Chrysler knew their customers didn’t want those kinds of cars, and they were right. But there were other customers who did. And as a new generation (baby boomers) came into the market, Japanese automakers rode that demographic boom for decades. In fact, they’re still riding it. Last year Toyota sold more cars in the U.S. than any other automaker.

So, could Haval, Great Wall or Chery become major players in the U.S.? I know that sounds preposterous, but if anyone had told me 40 years ago that Toyota would one day outsell GM in the American market, I would have told them they were crazy.

But happen it did, and it all began when the big automakers ignored the bottom end of the market.

Soaring U.S. Car Prices Open Door to Low-Cost Chinese Imports

A decent Chinese car could be shipped to America and sold for under $18,000. That’s ten grand less than the average used car.

www.wardsauto.com

Chinese cars need better names bruh

 

[Hamartia Antidote]

Chinese cars need better names bruh

They have some already and the company is named "Kandi"

 

[Madni Bappa]

They have some already and the company is named "Kandi"

Next 5 years when Chinese cars start showing up in US. The rednecks and neo cons will have another meltdown.

US is essentially back to McCarthyism. Anything that doesn't align with the ideologies of rich white nations in North West hemisphere of the world will be "Cancelled"

 

[tower9]

If Japanese made cars cannot get any significant portion of the U.S. market, then Chinese made cars has 0% chance.

The only reason why Korean made cars have a place in the U.S. market is due to tariff exclusions.

Japanese cars have a huge portion of the US market, what are you talking about? In many large urban areas, they are at least 30% or more of the cars on the road. Unless you are in Oklahoma and just talking about what you see on your main street.

This is a pretty good channel for reviews on Chinese cars in English.

 

[BigMelatonin]

A lot of Americans are racist, not sure how well Chinese cars would sell unless they were significantly cheaper than alternatives. And most likely the US would outright ban imports of Chinese cars as they push forward in their ideological war on China. Personally though, I would love to be able to get a Chinese EV.

 

[Madni Bappa]

A lot of Americans are racist, not sure how well Chinese cars would sell unless they were significantly cheaper than alternatives. And most likely the US would outright ban imports of Chinese cars as they push forward in their ideological war on China. Personally though, I would love to be able to get a Chinese EV.

Agreed year on year. Chinese cars are getting better. They're not knock off copies anymore. They're legit EVs.

 

[Communism]

Japanese cars have a huge portion of the US market, what are you talking about? In many large urban areas, they are at least 30% or more of the cars on the road. Unless you are in Oklahoma and just talking about what you see on your main street.

This is a pretty good channel for reviews on Chinese cars in English.

You are looking at North American made cars with a Japanese badge from a supposedly Japanese company usually designed in the U.S.

Take note that I specified Japanese made cars.

As in car that is manufactured in Japan and shipped to the U.S. with tariffs.

If the people here cannot understand basic economics, then I can only assume that you know nothing about the car market in the U.S. at all.

A lot of Americans are racist, not sure how well Chinese cars would sell unless they were significantly cheaper than alternatives. And most likely the US would outright ban imports of Chinese cars as they push forward in their ideological war on China. Personally though, I would love to be able to get a Chinese EV.

Basic economics is now "racism"

Try harder next time.

 

[tower9]

A lot of Americans are racist, not sure how well Chinese cars would sell unless they were significantly cheaper than alternatives. And most likely the US would outright ban imports of Chinese cars as they push forward in their ideological war on China. Personally though, I would love to be able to get a Chinese EV.

Few white Americans will buy Chinese cars unless maybe some super high end novelty EVs like Nip which may appeal to nerdy techie types. But most black or Latino Americans won’t really care as long as they like the car.

It will take a while to get traction though but that’s to be expected.

 

[cloud4000]

US car dealerships have lost their minds......demanding huge markups on regular cars. If China can figure a way to let USA consumers buy a new car online at affordable rates.....then it will grab a huge piece of the USA auto market.

The current way to buy new cars in the US is anti-consumer as far as I'm concerned. Many states have laws that mandate the use of a dealership to sell cars even though these dealerships are no longer needed. Manufacturers would prefer to sell directly to the consumer and cut the middle man out. The manufacturer gets better margins and consumers save a few dollars. Unfortunately, these dealerships have such political power that no one has dared to challenge the system.

 

[FairAndUnbiased]

I don't think Chinese cars will be competitive in the US for a while due to regulatory environment, strong competition and other social and market factors. US car market is harsh and focuses on the vehicles that Chinese companies are not that good at - SUVs and pickups.

BYD failed in the consumer segment despite good specs, but their commercial vehicle segment is doing well.

It is better to consolidate ASEAN/African/MENA markets first, then Australian, then UK markets. Finally, do a test trial in Canada before entering the US.

 

[Hamartia Antidote]

I don't think Chinese cars will be competitive in the US for a while due to regulatory environment, strong competition and other social and market factors. US car market is harsh and focuses on the vehicles that Chinese companies are not that good at - SUVs and pickups.

BYD failed in the consumer segment despite good specs, but their commercial vehicle segment is doing well.

It is better to consolidate ASEAN/African/MENA markets first, then Australian, then UK markets. Finally, do a test trial in Canada before entering the US.

Chinese EV companies like BYD had an early head head start back in 2008 and could have cornered the market but they dropped the ball allowing a company like Tesla to spring up.

I think it is a little late to shoot for the gasoline market as it is likely not a growth path.

 

[beijingwalker]

Chinese EV companies like BYD had an early head head start back in 2008 and could have cornered the market but they dropped the ball allowing a company like Tesla to spring up.

I think it is a little late to shoot for the gasoline market as it is likely not a growth path.

Western and Japanese car makers had a head start for EVs, not BYD, but they didn't stick to it, in cars and cellphones, China is a very latecomer , but she made leaps and bounds in the last few years, no one invests more money than China in EV development and no countries grow faster in EVs than China, even Tesla is heavily dependent on Chinese batteries, China doesn't only have many EV makers, China controls the whole supply chain of this industry.