US carmakers threatened by US-China trade war

From Ford Mustangs to General Motors, American carmakers are worried about the US-China trade war. Peter Campbell, global motor industry correspondent, finds at the Detroit auto show that the trade war between the US and China is also just one of the headaches that the industry is facing.

You’ve got to see the other day i was just read cal let’s do edibles what is an american car you might think of this the ford mustang the iconic american sports car built at flat rock in michigan but take a closer look the wheels are from australia and this is the transmission the seals come from china the control units made in germany the clutch comes from belgium

And the whole unit is assembled in mexico in fact only about half the content in this car comes from america the car industry is one of the most globalized on earth but their entire way of operating shipping parts across the world to a network of factories is under threat from the trade war between the us and china and that is just one of the headaches that the

Industry is facing car sales are slowing in the us and consumers are switching from passenger cars to sport utility vehicles general motors plans to close for plants here in the us in order to accommodate the shift but the biggest concern is about china for many of those at the show it accounts for more than half of their profits and after almost three decades of

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Growth sales are stalling several manufacturers have skipped this year’s detroit auto show to save money including jaguar land rover which last week cut thousands of jobs partly because of slowing sales in china but among those who have turned up the concern is palpable as you walk the stands and speak to those who work in the industry since the last 30 years we’ve

Been in a very mature market where it’s really not growing it’s growing slower than population but it’s cyclical and it goes down typically about 15 to 20 percent for 25 percent from peak to trough we don’t expect it to be deeper the last one was deep in part because there was so much pull ahead from trying to keep the plants running in the 2000s we don’t expect a

Deeper not the 40% more like the 15 or 20 percent but this is at the same time when they’re putting a lot of money in it electric and a lot of money into autonomous vehicles so they can’t do as much of new cars here here here on the same cycle and invest in all these new technologies so that’s why people are making cuts making repositions to get ready for it but

It isn’t all bad news the car industry is used to the ups and downs of the economic cycle and for some companies things are still going extremely well general motors just upgraded its profit forecasts while volkswagen just announced record annual sales nestled in among the pickup trucks and the gas guzzlers you might find the occasional electric car here like

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This chevy bolt but if these are the future the car makers don’t seem to be very keen to show them off at the auto show that’s because they can’t make any money on them i’d much rather consumers kept buying vehicles like this monster motors were there monster margins and that’s part of the problem because all of the car makers will need to spend billions upon

Billions in the next few years to develop these and they’ll be forced to sell them at a loss to meet emission standards that means they won’t have as much profit to invest into new models or new technologies for an industry that’s dependent on convincing motorists to buy its newest shiniest vehicles that’s an existential problem with sales at peak levels massive

Spending commitments ahead of them and a dwindling public love for the motorcar the icy conditions here in detroit stretch far across the global motor industry peter campbell financial times detroit

Transcribed from video
US carmakers threatened by US-China trade war By Financial Times

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