It’s Not Just T-Shirts and Cheap Electronics Anymore

China’s next big export to North America will surely be cars. I know, it sounds funny, right? Chinese cars! But, why not? Just look at what South Korea’s Hyundai did in North America. Since the first car came some quarter of a century ago, and after a rocky start, particularly in Canada, the carmaker now operates a new $1.1-billion assembly plant in Alabama, an engineering design lab in Michigan, and a testing center in California. To top it all off, just a few months ago, the J.D. Power & Associates ranked Hyundai among the top three car brands in North America.

True, Chinese products, while cheap, do not have the best reputation for quality. Then again, Japanese cars faced the same hurdle decades ago. And look at them go now! Toyota is a profit machine and the first in line to take over the ailing General Motors. Honda and Nissan are following closely behind. One-third of all car sales in Canada were attributed to Japanese automakers. And, in 2005, out of the top ten cars sold in Canada, seven were Japanese.

I’m not a car expert. For me, having a car is simply tool to get from point A to point B. So, it took me a while to find the names of Chinese automakers. Not surprisingly, there are quite a few: Chery Automobile Co., (no, it is not Chevy, but Chinese are famous for “slightly” modifying popular brand names and making them their own), Shanghai Automotive Industry Corp., and Geely Automobile Co. Geely was the first to show its products at the last Auto Show in Detroit.

Emerging markets are already buying Chinese cars. Industry experts say that by 2010, we could see the first Chinese cars hit Canada’s market. Chinese auto parts makers are already here, selling CDN$1.1-billion worth of parts just last year. For comparison purposes, five years ago, auto parts sales totaled only CDN$200.00 million.