Welcome to the Daily 5 report for Friday, Sept. 12.
DETROIT — Among the enlightening panel discussions and fireside chats at the Automotive News Congress here on Thursday, this one focusing on China's automotive ambitions highlighted perhaps the most troubling headwind facing global automakers.
Panelists, speaking in the future headquarters of General Motors in Detroit, warned that Chinese automakers pose an existential threat to the rest of the industry.
"Think of China in terms of a massive earthquake followed by a devastating tsunami," said China expert Michael Dunne, CEO of Dunne Insights. During the last five years, China's auto market went from 6 percent electric vehicle penetration to 50 percent. He also said that, inside China, global automakers saw their shares fall from two-thirds of the market to one-third.
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"The first tsunami is inside China," Dunne said. "They have a massive price war. No one's making money inside China, and as a result, everyone's looking to export." He added that Chinese automakers are on track to export 9 million vehicles per year, and "they're going to markets all over the world, except the United States and Canada."
Longtime auto executive Larry Dominique, who operates his own LD Management Consulting business, said auto executives are aware of what's coming, but they don't fully appreciate the size and intensity of the threat, Larry P. Vellequette wrote in his story.
For more Automotive News Congress coverage, click here.
"When I look at it today, there is a sense of panic, but I also don't think there's enough sense of urgency that goes along," Dominique said.
Dunne said U.S. and foreign automakers are going to be extremely disadvantaged not only on technology and speed, but also on cost containment, Vellequette wrote.
"You can't teach tall in basketball, and it's really hard to match the Chinese on costs," Dunne said.
Meanwhile, just as GM CEO Mary Barra was speaking to the Congress in the afternoon, news broke that the company closed a key engineering hub on its Warren Tech Center campus after two employees tested positive for Legionnaires' disease.
While the building has not been confirmed as the source of the disease, it will remain closed until at least Sept. 22, pending further test results, Automotive News sibling publication Crain's Detroit Business reported.
That's it for now. If you want to see this story in your browser, click here.
— Philip Nussel, online editor
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