China Automotive

North America automobile manufacturers saw their dominance first challenged by the Japanese in recent times, then by the Koreans. What's next? The Chinese -- the Indians will probably not be competitive enough to break out of their domestic market. The assault will from the Chinese will come from two fronts. One will be the auto manufacturers from outside China that are setting up plants in China to produce cars not just for the domestic or third world markets, but also for export to North America. The other front will come from the Chinese manufacturers with aspirations to be more than just the work-horse of external car makers or domestic players. These auto manufacturers are the ones to watch out for.

Granted, Chinese manufacturers have a ways to go yet. The quality of their cars wouldn't pass North American muster; they would have to meet or surpass North American safety and emission standards; and China still has to import most of the components needed to produce cars -- which deals a heavy blow to producing inexpensive cars -- even with the cheap Chinese labour market. That being said, China will overcome those hurdles, and while wages will most likely increase to match the increase in standard of living in China, they will take the same path as Japan and Korea, and take their slice of the global automotive industry -- mostly from North America.