Wednesday, December 16, 2020

The US Automotive Market From a Global Perspective

Before Tesla, there were only 3 major American automakers: General Motors, Ford and Chrysler. Apart from some very small companies, every other automobile manufacturer in the US had either gone out of business or been bought up by one of the Big Three. And even Chrysler had been owned for a while by Daimler-Benz, turning the American Big Three into a Big Two. Chrysler is an independent, American-based entity again, and the Big Two became the Big Three again. 

The inability of any other corporation to challenge the Big Three led many to predict that Tesla wouldn't last, and some, although fewer, are still predicting that Tesla will either go broke or be bought out by one of the Big Three. Also, many people give other new American automakers such as Rivian, Bollinger and Lucid little chance of surviving. Some disagree, saying that EV's have changed the game, as demonstrated by Tesla. To that, some reply that the game is still making automobiles and that it hasn't changed all that much, despire Tesla having made a huge splash.

If we change our focus from the US to the global automotive industry, suddenly things are much more complex: there are currently more than 50 different countries who each have their own indigenous automobile brands. I'm not talking about all of the countries where automobiles are manufactured, because a company based in one country will very often have manufacturing plants based in other countries. If we count every country where there is an automobile factory, the count goes well up into three figures. No, what I mean is that more than 50 different countries have their own independent companies making their own separate brands of automobiles.

That number might seem very high to some Americans, because most of those countries have never tried to import cars to the US. From the 1980's to the present, the only countries who have imported cars to the US in large numbers have been Japan, Germany, France, Italy, South Korea, the UK, Sweden, Czechoslovakia/the Czech Republic and the former Yugoslavia. In the 1980's both Yugo from the former Yugoslavia and Hyundai from South Korea began importing automobiles into the US. At first, both brands, while undercutting every other automaker in the the US in price, were also very inferior in the quality of their products. Yugo disappeared again from the US market, while Hyundai improved its product quality to an amazing degree in a remarkably short time and are now thriving in the US along with their South Korean subsidiary KIA.

China's enormous automotive sector will very soon be trying to make a go of it in the US, with three brands importing cars: XPeng, Nio and Kandi. The US imports from these companies will be electric only. And other Chinese brands will be following, most likely importing EV's only. 

It seems that the whole wide world is in love with crossovers and SUV's. I'm not. But apparently the whole world is. In India, wealthier customers have been buying the same cars as wealthy people elsewhere: Rolls Royces, Mercedes, BMW's, Jaguars and so forth. They've been buying the same electric SUV's, The Jaguar I-Pace and the Audi e-tron. But there's a brand-new all-Indian electric SUV, the Tata Nexon EV, 


 

and the Indian automotive press is going more than a little bit nuts over it. Reviewers say it's just as good as the I-Pace and the e-tron, some say it's better. There's obviously a lot of Indian patriotic pride here over a domestic product which can stand comparison with the finest luxury SUV's in the world, but there's obviously also a very special new vehicle here. 

And although I haven't heard anyone else say anything about it, I have wondered whether Tata might bring the Nexon EV to the US, as the first Indian attempt to enter the US automotive market.

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