The manufacturing bubble is getting ready to burst in China


January 22, 2013 by

For the last twenty years or more, we have been bombarded with newspaper headlines about car companies moving their manufacturing operations to China, to take advantage of favourable conditions, just like the companies hosting online casinos that were situated in the UK before (see The country’s veritable dearth of cheap labour, subsidies, lax regulations and a favourable exchange rate, have contrived to make China a Mecca for car companies looking to reduce their production costs. It’s a trend which has seen the rapid decline of the importance of the US as a car manufacturing hub, as well as depriving the country of employment opportunities for its skilled workforce.econ_china49__01__inline405

In 2013, however, we may finally begin to see the turning of the tide.

Recent reports suggest, following similar announcements already made by Nissan and Honda, that Toyota could be the first foreign owned firm to shift all of the production of its US-sold cars to the United States. The advantage of cheap Chinese labour is slowly becoming a benign factor in the manufacturing process, with rapid advancements in robotics predicted to eventually replace Chinese workers, thus making shipping cars from China to US customers an unnecessary additional cost.

While Toyota has only hinted at moving the production of its entire US-sold cars to the US, it already builds 70% of its US-sold cars in the country. With Toyota planning to ship Prius production to the US by 2015, alongside plans to create 3,500 jobs in North America, while investing $1.6 billion, it certainly seems that the future is bright for car manufacturing in the United States.

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