Speeding Ahead: China’s Auto Industry

Since our last post, the video for the panel discussion, Speeding Ahead: China’s Auto Industry, held at the JP Morgan China Conference 2010, has become available. I had the opportunity to participate on this panel with Michael Dunne, President of Dunne & Co. and Dr. Enki Tan, Executive Chairman of GITI Tire. The video runs for approximately 50 minutes and includes opening comments by the three panelists, as well as the entire question and answer period.

During the Q&A segment, we fielded questions on a wide range of issues including the Foxconn suicides and the strike at Honda and what they may mean for wage costs in China, preserving margins in China, electric vehicles,and the overseas expansion of China’s vehicle makers. Given growing trade tensions between the United States and China, Dr. Tan made a particularly telling comment about the impact of tariffs.

As the head of a major tire company that manufactures tires in China, Dr. Tan is in an ideal position to comment on the tariff on tires made in China implemented by the Obama Administration last year. According to Dr. Tan, the tariff cost American consumers $2 billion and did not produce a single U.S. job. That’s because the capacity to produce the tires affected by the tariff does not exist in the United States, and companies like GITI Tire simply passed along the higher costs to consumers.

U.S. lawmakers would do well to listen to the comments of knowledgeable industry insiders like Dr. Tan when formulating policy.

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