Your next Dodge . . . made in China?

Jocelyn Ford Sep 25, 2006


SCOTT JAGOW: DaimlerChrysler plans to roll out a cleaner diesel engine in a couple years. And apparently, it also wants to sell Chinese-made cars in the U.S. Today, a Chinese automaker named Chery said it’s been talking with Daimler about producing small cars in China and selling them under the Dodge brand in the states. As Jocelyn Ford tells us, this could be the future.

JOCELYN FORD: If high-tech companies build their low-end computers in China for export around the world, why can’t auto companies do likewise? The attraction is obvious.

SUN JIAN [translator]:“The cost of labor in China is much lower than in U.S.”

Auto analyst Sun Jian of AT Kearny says labor in China accounts for about 5 percent of the total cost of the car. In the U.S., it’s about 15 to 20 percent of the cost.

He expects within the next five years many multi-national automakers will export inexpensive cars from China to the U.S. and Europe.

But he says this is not necessarily bad news for U.S. autoworkers. Consider the IT or information technology industry.

JIAN [translator]:“Today a lot of IT products are assembled in China. But in U.S. side you still see a very good booming IT industry because they keep working on the high end.”

It will be a long time, he says, before China will export luxury cars.

In Beijing, I’m Jocelyn Ford for Marketplace.

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