Jeremiah 29:11

Yep, if China would to ever come out with a good car......we could have serious problems in 5-10 years.

What was IBM is now owned by Lenovo in China making PC's. Watchout Dell and HP!

NEWS ANALYSIS
By Brian Bremner and Kathleen Kerwin


Here Come Chinese Cars

China aims to be a big auto exporter, with help from big names manufacturing in the country. Detroit isn't looking in its rearview mirror -- yet
Audacious, gutsy, and maybe a little nutty -- how else to describe the push by New York auto entrepreneur Malcolm Bricklin and China's Chery Automobile Co. President Yin Tongyao to import and sell 250,000 mainland-made sport utilities, sedans, and sports coupes in the U.S. starting in 2007?

After all, Chery produced only 80,000 cars in all of 2004, has near-zero brand recognition outside China, and has been sued by General Motors' (GM ) South Korean unit for allegedly ripping off the design for its best-selling QQ minicars in China -- a charge Chery denies. And while Bricklin was expected to announce his first dealer on May 26, U.S. auto execs aren't exactly losing sleep over the Chery threat -- not yet, anyway (See BW Online, 5/26/05, Malcolm Bricklin's "Bit of P.T. Barnum")

EARLY DAYS. Big Three execs did take notice, however, when Honda (HMC ) announced plans to export compact cars from China to Europe starting in June. Honda already sells about 200,000 locally built vehicles in China a year, ranging from Accord sedans to Odyssey SUVs. In April, with local partners, it began production at a new assembly plant in Guangzhou that will eventually build and export 50,000 Fit compacts a year to be sold in Europe as the Jazz. Honda won't say if it plans to send China-built cars to the U.S., but it hasn't ruled out exporting other models from China eventually.

In the global auto industry, Chery and Honda are on opposite ends of the spectrum. But they do share this: Both are betting big that the Chinese auto industry is entering a new phase that will see a shift from manufacturing only for the fast-growing local market to become an export base for the rest of the world, too.

This transition is in the early stages. Of the 405,000 vehicles exported last year, according to J.D. Power & Associates, just 10,000 were passenger cars. Low quality and high component costs will keep Chinese auto exports to the U.S. and Europe in the novelty category for the next few years, analysts say.

RISING QUALITY. That's no reason for Western carmakers to be complacent, though. China is closing the quality gap and building a base of low-cost suppliers that could eventually allow it to unleash inexpensive, well-made cars on the West.

And because local production capacity of 3 million vehicles a year is currently outstripping demand by about half a million vehicles, there are already a lot of wheels looking for a garage. "It's inevitable," says Mark LaNeve, chief of sales and marketing at GM. "They'll follow the example of the Koreans and Japanese."

Korean cars gave Detroit fits in the late '90s by undercutting domestic small cars on price and outdoing them on quality -- then moving up into other segments. Autos from China could provide more lower-cost competition for the Big Three at a time when GM and Ford (F ) are already reeling. That could cost them, along with Chrysler, more market share and prod them to move more of their own production offshore.

GOVERNMENT PUSH. How fast can the Chinese gear up? The way things are going, it won't take 20 years to match Toyota (TM ) quality levels, as it did for the Koreans. And with Chinese auto assembly workers earning $2 an hour -- vs. $22 in Korea and nearly $60 in the U.S. for wages and benefits -- it may not be long before China has the wherewithal to start selling competitively priced cars overseas. "The Chinese are probably five or six years away from being able to sell a competent low-end ca