• 0 Posts
  • 16 Comments
Joined 3 years ago
cake
Cake day: June 17th, 2023

help-circle

  • Government subsidies are paid for by the taxpayers, yes, but what companies are doing with subsidies matters. It’s common practice in the US for companies to take subsidies and then continue with high prices (i.e. pocketing the government subsidies, as I was saying), unlike the price wars we’re seeing in China. So at least they’re seeing lower prices in China thanks to subsidies whereas I can’t say the same over here.

    Interesting that Chinese car manufacturers pay their suppliers much later, I didn’t know about that. I’m sure that makes a difference in the quarterly budgeting for suppliers, but if manufacturers like BYD make good on their payments eventually then suppliers know what they’re getting into.

    China’s car industry being in trouble is up to the definition of “trouble” I’d say. Too much competition can be a kind of trouble, but currently that means really low prices. Eventually it’ll mean a bunch of failing companies and consolidation, but that’s how a market is supposed to work. Meanwhile in the west we’re already at the consolidated stage with only a small number of auto companies that are so comfortable that they feel they can charge top dollar for bottom-of-the-barrel quality (particularly in the US), still getting subsidies and tariffs in their favor and are considered too-big-to-fail so they can safely assume they will be bailed out every time.