Turnabout Is Fair Play As Foreign Carmakers Stick Chinese With Loans

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1st Gear: How To Make Money In China

There's a great line in The Coup's "Repo Man" that goes:

Even hillbillies at a party line dancin'

Get they Ford trucks with poor financing.

Banks that give the loan figure — damn, in the worst case

We makin' money cause we had it in the first place!

While the U.S. (and other countries) financed huge sums on what were essentially Chinese credit cards, it looks like the world is getting some of that interest back by extending car loans to Chinese consumers looking to buy cars without cash.

The WSJ has the story and the numbers, pointing out that loan-financed cars jumped from about 5% of the market in 2005 to 17% in 2013:http://online.wsj.com/articles/forei...

So what's going here? Two things:

1. Young people in that country have a different view of money than their parents and, with a greater understanding of how the rest of the world works, they're ok with financing.

2. Carmakers realize that the Chinese market won't grow at like 100,000% every month and financing is a great way to make profitzzzzzz.

So far, foreign car makers are leading the charge, a move analysts say is helping expand their share of the country's market. As elsewhere, the auto makers have set up financing companies in China, sometimes with local partners, and offer dealers incentives to push loans.

Chinese consumers, they're just like us!

2nd Gear: China Is Dropping Tax On Green Cars

Turnabout Is Fair Play As Foreign Carmakers Stick Chinese With Loans

China consumers would also like to be given all sorts of breaks to buy electric cars — or at least the Government would like to do so. According to Bloomberg, any fuel cell/plug-in hybrid/EV will be exempt from a 10% purchase tax until September 2017.

Add to that all sorts of other incentives for buying electric cars and you've suddenly got a reason for people to start looking at what BYD and Tesla have to offer.

Of course, that's only one part of the picture:

More government support is needed to develop the infrastructure required to promote EV usage, such as building more charging stations that are conveniently located, he said. The Chinese state-run research center in charge of helping the government draft automotive policy said last month that it recommended that electric-vehicle manufacturing be opened to companies other than carmakers.

Bring it on.

3rd Gear: Roush Makin' That Propane

Turnabout Is Fair Play As Foreign Carmakers Stick Chinese With Loans

As The Detroit News points out, for all the talk of alternative energies the most popular fuel source outside of diesel and gasoline is good old fashion Propane (not Butane, Butane is a bastard gas).

And Roush — a company with a division for everything — is there to help you convert your commercial vehicle into Propane. CleanTech will take your school bus or F-250 delivery truck and make it run on gas.http://www.detroitnews.com/article/201407...

The benefits? It's cheaper, more likely to be locally produced and has fewer emissions. The downsides? It's a little slower to start up and requires an infrastructure to fill up vehicles that's not as robust to as the regular gasoline one.

4th Gear: Honda Expanding Recall For Airbags To One Million Cars

Turnabout Is Fair Play As Foreign Carmakers Stick Chinese With Loans

The Takata airbag recall is huge, but since it's spread out over multiple carmakers it's one of those things that has largely slipped notice.

You may notice it in California, though, where Honda recalls for Takata airbags has expanded its Honda Accord recall from 500,000 to one million cars, part of a total recall of three million total cars.

Here's the scary deal:http://www.freep.com/article/201407...

It's the same problem as always: The air bags made by Japan's Takata can rupture with too much force when a crash occurs. When they do, they spew metal chunks that can injure a car's occupants.

Yeesh.

5th Gear: Delphi CEO Going To Senate

Turnabout Is Fair Play As Foreign Carmakers Stick Chinese With Loans

Speaking of recalls and suppliers…

Delphi CEO Rodney O'Neal (on the right) will be testifying before the Senate panel looking into the GM recall issue on July 17th to talk about what happened because Delphi was the one who made all of those faulty ignition switches.http://www.reuters.com/article/2014/0...

The possible line of inquiry?

"It is our understanding that a fix was proposed by Delphi regarding the ignition switch in 2005 but GM did not adopt the change," wrote Rockefeller and Senators John Thune, Claire McCaskill and Dean Heller.

Curious how this plays out.

Reverse: Nils!

The United States Patent Office issues the Swedish engineer Nils Bohlin a patent for his three-point automobile safety belt "for use in vehicles, especially road vehicles" on this day in 1962.

http://www.history.com/this-day-in-hi...

Neutral: Are you aware of the airbag recalls?

Is this something you're closely following or has it mostly slipped your attention?

Photo Credit: AP Images