The New Big Three Automakers

Russia, China, Mexico–Russia, China and Mexico–

[dropcap color=”#ff6600″ font=”verdana” fontsize=”50″]N[/dropcap]ow that all the talk of the U.S. Auto Industry bailout has subsided. Now that GM, Ford and Chrysler have allowed car guys to enter the bridge and steer the ship. Now that we have new exciting models coming down the pipeline and our BigThree is a viable contender to the feature laden Japanese and meticulous Germans. Now that all that is done we can relax and enjoy the Big Three, right? Wrong! We now have another big three to think about. Not three companies, but three new countries that will make-or-break the industry and change the scope of car buying for future generations. No more hot dogs, steaks and Coke. Its Okroshka, Mantou and Pulque. Eat up!

The Russia of more modest means has given way to more sophisticated tastes. The attention of the world’s carmakers was the order of the day at the Moscow International Automobile Salon, with Volkswagen and GM announcing 1 billion Euros ($1.3 billion) in new investments. Renault sees Russia challenging Brazil to become its No.2 market. While mainstream companies are investing in the new Russian market, there is also an appetite for luxury behind the iron curtain. Maserati is exporting the Gran Turismos and expect Rolls Royce and Bentley to follow suit. The oil-fueled growth of the Russian economy has made it the second-biggest car market and a target for those offering more everyday rides. Car sales in Russia grew by 40 percent in volume terms to over 2.6 million vehicles.

Russia is not alone. Lincoln will forsake our parents for a while here and instead of revamping the current lineup, it will begin exporting to China, striking while the iron is hot, so to speak. Not only will China be exporting its own brands to different countries (Chery and Foton to Great Britain. Geely to the U.S.), but Honda will begin exporting a Chinese-made Fit for sale in Canada. Let us not forget that Buick has had a stake in China for many years and Audi makes special long-wheelbase models for the Chinese consumer. The market in China was once thought too insignificant to bring high-volume production. The cost of investing in components because local materials were of low quality also made many steer clear. However U.S, European and Japanese automakers have looked to China and served their growing appetite for foreign brands.

While the sales in Russia and China are increasing, the cost of manufacturing in Mexico has proven to be very cost effective. Audi, Mazda and Nissan are building brand new plants in Mexico, while Ford and Volkswagen are expanding current production. You can shout “Made in Italy”, “Made in America” or “Made in Japan” all you want. The new mantra is “Made Wherever the Market Is”.

Do you think that the next “Big Three” in the world are China, Russia, and Mexico for automakers? Leave a comment and let us know!


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