Automakers Are Moving To This Country. Why?

Issue #168

Today, we discuss how times are changing when it comes to Chinese automotive manufacturing, and the one country that could take over.

Market News

• Read this article to learn how the Cadillac Escalade IQ solves big EV problems with an American attitude. 

• Jaguar Land Rover saw its finances turn to shambles after a cyberattack. Here’s the current situation. 

• Ford’s new headquarters could harbor greatness if the company uses them right. Here’s more. 

• Wait, the Nissan Pathfinder is exciting? This article makes a case for it. 

• Ford now sells certified used cars on Amazon, because, why not?

Safety and Recalls

• We cover weekly (or daily, in Ford’s case) recalls, so we share this article to know how to check if your car has a recall. 

• GM recalls the Cruze and the Verano over exploding airbags. Here’s more. 

• This industry expert explains why there have been so many recalls lately.

Car Culture

• Hyundai’s concept for its new offroader looks badass. What do you think?

• This article explains why front-wheel-drive cars (sometimes) suck, and why they don’t. 

• The Honda Prelude isn’t out and dealerships already are charging more than they should, as you can read here. 

• If you work at Wendy’s, you’re eligible for a discount on your new Durango Hellcat. Seriously. 

• An obscure British company is making a comeback. Here’s why it matters.

Video Of The Week

Here are the sickest builds at SEMA 2025!

In The Know

Automakers Are Moving To This Country. Why? 

Volkswagen is losing its grip in the Chinese market, and it should matter to all of us. As this article highlights, VW lost its number one spot in China sales in 2023, when Chinese automaker BYD became number one. 

The German automaker's momentum loss continued into 2024 and 2025. Now, it's struggling to stay relevant, with 11 new models designed specifically for Chinese audiences. A desperate move in challenging times is more likely to be a make-or-break moment for VW. 

It's also important to everyone linked to the automotive industry, but why? 

It matters because it's a sign that the beast is already out of its cage. In fact, it escaped a long time ago; it was only lurking in the dark, and it's ready to pounce. Top Gear predicted it some years ago. 

The first partnership between China and a Western manufacturer was with American Motors Company in 1983 to produce simple, rugged vehicles. Here's the original article. (I bet you didn't know that).

Since then, China has imposed strict conditions on automakers seeking to work with it. One of the most notorious is that no foreign automaker will have more than 50% control of the company in China.

To accomplish this, automakers must then create joint ventures with Chinese manufacturers. 

Ironically, the first big one was with VW in 1984, when the German company provided design and engineering, while China offered cheap labor and high-speed manufacturing rates. 

This Car And Driver article explains much of how China managed to establish such conditions from early on. 

What's fascinating is that 50% of the control gave China significant leverage. Foreign companies couldn't do everything, so China basically said, "Hey, let us do the batteries and the chips. Tell us how you want them, and we'll do them."

Foreign automakers didn't bat an eye! They could use these chips and batteries in other markets. Meanwhile, domestic car production in China was so bad that locals didn't trust the Chinese brands. Instead, they ironically purchased foreign brands made in China, as this article explains. 

Meanwhile, Chinese engineers at these joint ventures were busy learning everything they could. In no time, China became competitive and cheap. So, they started exporting cars to other rising markets such as Latin America and Africa, where price is king. 

But don't think that they ignored domestic markets. Instead, they aimed to pamper Chinese buyers by creating more luxurious brands and models. In no time, the country took off, as this article explains. 

And China was mindful of political situations. During the first Trump presidency, China even lowered the requirements, allowing BMW and VW to have more than 50% of control in the joint venture in response to tariff threats. 

But there was a problem: Chinese buyers wanted better things so the cars became more expensive and better. Foreign automakers needed to step up their game.

The problem was that, for them, a car for the Chinese market ate away at their profits. Meanwhile, younger Chinese buyers were already accustomed to Chinese brands, so they started buying them. 

Foreign automakers were in a pickle–and an expensive one, at that. 

That's where we are right now. Trade war tensions are rising, and China and the US aren't budging, but automakers must keep working and need cheap labor. Here's where India comes in. 

India is working hard to increase its production capacity and create a similar joint venture, with one difference: companies aren't as Government-controlled as their Chinese counterparts. There's more freedom, cheaper labor, and a growing trajectory. 

So, this could open a new era in automotive production. As this article explains, India is like China, but it isn't. There's more opportunity, plus a willingness to work with the US. 

So, a new divide comes up: one part of the world could be driving only Chinese cars (including Europe), and the other American-Indian cars. In the middle, there will be American cars.