Auto Assembly in China

If you don't think more and more of the upstream parts sourcing for carmakers is moving overseas, take a look at this site:
They're selling e-books for hundreds (if not thousands) of dollars each that contain information on the best practices for setting up plants. China Automotive
Assembler Industry US$2,550.

OK, that's an e-book for over $2500.

Whether you like it or not, moving cars made in part or in whole in China is part of the future economic pie for the auto transport industry.

Remember back in the early days, when Toyota was barely a "blip" on anybody's radar?

The good news is that the future is rarely the way you think it's going to be. Nobody in the car business would have predicted Toyota's rise. Nobody would have predicted that Toyota would be building more and more plants and hiring American labor. It is interesting how such hybridized solutions will develop in a free economy. By locating their plants closer to the market, Toyota minimizes attendant costs. They also diversify their supply logistics, which is a good hedge against adverse conditions such as war, supply bottlenecks, market "hiccups" and things of that nature. You will remember from your high school World History class that Japan is not a nation with many abundant raw materials such as natural gas, coal, iron ore, etc.

What does all this mean for folks in the auto transport industry? Everything and nothing. More foreign car makers entering the North American market means more business to go after at the ports. More domestic production means more business at the railheads and vehicle assembly plants. If America is truly undergoing a structural (vs. cyclic) shift in the economics of the auto business, then we will see more plant closings and more plant openings. Ford, GM, Daimler-Chrysler et. al. are saddled with a lot of obligations they made to unions regarding health benefits. Think about how much longer people are living today. Think about all those union widows getting their cataract surgeries done in a hospital for a co-pay of $3! (I'm not making this up, I swear!) Somebody is paying for that.

There will always be opportunities presenting themselves-- both the opportunity to fail and the opportunity to succeed. As the structural economics of car manufacturing changes, the nature of auto transportation will change: everything from trailers and auto tie-down methods (wheel straps, anyone?) to the way accounts are won and serviced. Look at what happened to Allied and Volkswagen of America a couple summers ago. So in conclusion, expect more change, faster, and with less predictibility. The future just ain't what it used to be.