In China, "Buy American" Still Resonates

(CBS)  Think the wheels are coming off the global car business? Think again.

U.S. automakers sold about 858,000 new cars in March, according to market research firm Autodata - another dismal month for the Big Three, which saw North American sales drop nearly 40 percent from a year ago.

But General Motors says it sold a 137,000 cars and trucks in China in March, up nearly 25 percent from a year earlier and a new company record for the month, as CBS News correspondent Barry Petersen reports.

The China Association of Automobile Manufacturers reports that the country's auto sales hit a monthly record of 1.11 million vehicles in March. China's soaring sales coupled with falling U.S. demand make China, for the moment, the world's largest car market.

China sales are booming thanks in part to a government economic stimulus plan keeping showrooms hopping by paying out rebates for purchasing small cars.

And what's hot in this hot market?

"I love American cars for their performance," said one Chinese customer.

Turn on the TV and the market leaders are American. Both Ford and GM. build cars in China for China, and part of their success is what's in a name. In China, a Ford or Chevrolet is considered a high-end import.

"China is a face-oriented culture," said Bill Russo, an expert on the Chinese automobile market. "People buy an imported car in order to demonstrate an achievement of a particular social status."

And when is the last time you heard a GM executive say that "our factories are running flat out to meet that demand," as GM China president Kevin Wale recently did?

One key to success - designing cars just for this market, like a Buick model favored by Chinese executives and high-level bureaucrats.

"They tend to have a driver which means you have to put more attention to the rear seat passenger," Russo said. "The person who paid the money for that car is sitting in the back."

So the carmakers are making those back seats luxurious, with controls for air conditioning and stereo and lots of legroom for that back-seat VIP.

And the Chinese profits are sent back to Detroit, which means U.S. car companies are getting a badly needed boost back home from a country far away where customers still love to buy American.

[melony1]

Question: What if the Chinese who buy these cars do not make their car payments? Further, the Chinese are well-renowned for predatory pricing. They sell cheap, eradicate the competition, and then THEY WILL increase their prices, whether or not you believe it. In addition, ?China keeps [its] currency, the yuan, significantly undervalued. In this way, exports are cheaper and imports more expensive? (Atkinson, 2008, para.3). Let China buy from us for awhile, but stop buying so much from them. Between oligopolies such as Wal-Mart cozening with China, the landscape of America looks bleak for both workers and small businesses alike. The G.W. Bush Administration really annihilated "We the People."

[eddrojas]

i disagree with u vetsence.
i have no respect for the chinese idustrialists; they'l not hesitate to sell us toxic (literally) goods.
but if the big 3 have to cater to them in order to stay alive - so be it!
maybe thisis a good lesson for detroit; "FIGURE OUT WHAT THE CUSTOMERS WANTS; THEN, GIVE IT TO THEM"
that's an innovative thought when it comes to the american auto industry.

[vetsence]

Americans are their own best enemies and have no appreciation for what they have. Evidently even the Chinese know a good car when they see it.

[lucytomato]

Yes ,Chinese people still can't forget what Japan have done during 2-W-war in their own country .they hate japan,after 1895,they turn to unconditional emery., and never be friendly agein . That is useful for America

[ipfreak]

don't forget, buick has big sale in china not entirely because "face oriented culture". in fact, all of buick sold in china are built there and they also being shipped to the states for sale. the greatly improved quality has a lot of to do with that...

[sjc_1]

Some1,

I have been trying to get people to buy American cars for decades. They are convinced that Toyota is better than GM. When I show them the car ratings are about even, they still by Toyota. I will not give up trying, but unless people will look at the facts, they will not change their minds.

[give700]

Why do these American companies do better in China than in the U.S.?
Perhaps Chinese workers and engineers work harder and more diligent? They actually produce the products the locals want. The same cannot be said here in the US.

[jodiyo]

Not to forget production side, ie the Chrysler-Chery (Chinese automaker) and the GM Shanghai Automotive Ind. Corp. joint ventures.

Check it out: http://bigthreeauto.procon.org/viewresource.asp?resourceID=002324

[pugster]

American cars are not the most popular in China, it is actually VW's. VW, Audi's, Mercedes, and BMW are very popular in China. The recent subsidies increased sales of mostly American cars with lower hp engines.

[jazzbullet]

Chinese people still think as Japan as the enemy. They still think as someone who buys a Japanese car as a traitor. Good they don't know that US gave Japan all the money, steel and oil they needed to kill innocent Chinese and had ships to pick up any Americans in China right before their attacks.