Mar 1, 2008

A new Detroit

America used to be proud of its automobile industry, particularly in the city of Detroit, the capital of mass production and automation for auto-vehicles. However with the ideas of globalization and sourcing for cheap labor, we are seeing a new paradigm shift which has made the entire world our ball game.

No longer do we see a domination of the automobile industry by US companies, but we are beginning to see new "Detroits" sprawling all over the world. The Detroit in US may be experiencing a slow down. The workers there may be laid off and definitely many people would be out of employment, but look at the bright side. The US companies now have the advantage of building new Detroits all over the world, where the cheap labor is, where the huge international market is, where the love for the exciting Fords and Chryslers still burns with great passion.

Look at Ford itself. They have relocated their operations internationally and judging by their superb redesigned F-150 pickup, they may be on the rise to be a top seller in the auto industry in the US once again.

The challenge is not whether there is going to be a revival of the car industry in Detroit in the US in the future. The challenge for auto-makers is to see the whole world as a fresh market and to produce environmental friendly vehicles rivaling those of Nissan and Toyota from Japan.

On the other hand, we are beginning to see an interest of non-US car manufacturers willing to relocate to the US soil for practicality purposes. The US is still considered as the largest car market in the world. The closeness of the US car buyers, the cost savings of international transportation (especially with the high cost of fuel for transportation), the enthusiastic consumer feeling for high technology in automobiles etc. have encouraged other car manufacturers to build their cars on US soil.

These newcomers over time could include carmakers from India and China as well as existing ones such as Toyota, Hyundai and BMW, which have already invested massively further north in Canada or in southern US states. Together with their manufacturing plants, other supporting industries will be spawned for their various auto parts such as Ford parts or Nissan parts.

They may seem unlikely to build their plants in Detroit, US again, but there will be "another Detroit" in another part of the States.

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