Will you buy a Chinese Car?
As long as you didn't wake up from your summer hibernation today (I know, most animals hibernate in the winter, but it's better than the old living under a rock cliche'), you probably have noticed that Mattel had yet another toy recall last week, their third well-publicized recall in the past few months.
My first and most immediate action was to head into my daughter's room and round up all her Barbie dolls. My second thought was: if these recalls are becoming so prominent in something as seemingly innocuous (and reasonably uncomplicated) as toys, what's going to happen when the U.S. starts receiving cars made in China?
The U.S. is expected to receive cars from Chinese automakers as early as 2008, according to some recall. No matter who makes it to market first, whether it's Chinese manufacturer Geely or Chery (perhaps with the Dodge Hornet, which has a green light according to this article) or some other company's joint-venture car, will consumers really trust the manufacturing process—or for that matter, the company?
Some might equate this to the 1970s, when the Japanese began major sales efforts in the U.S., or to when the Koreans arrived in the late 80s/early 90s. Certainly there were similar concerns with those market entries, but how much of that was xenophobia? Mattel's recalls could give consumers reason to have genuine concern.
Certainly there will be a segment of the population (read: college students) that sees a car for under $10,000 and decides that a new car HAS to be better than a 10-year-old junker.
Are we simply in for another market entry like the Yugo? And have you watched the crash tests?
I'm as intrigued as the next guy about China's impact on the global economy. But it's one thing to manufacture toys at a cheaper margin. It's entirely different when you have to drive that cheaply-manufactured product in LA traffic.
