I saw this one on the news tonight, China now copying a Ferrari. Seems to me the ability to create what may be considered the pinnacle of global engineering technology makes a far more powerful statement than any military might can - if China can make this then we can make anything. Get prepared to say goodbye to your manufacturing base.
I am sure the quality isn’t all there yet, but it soon enough could be. Take the euro cars that have been in China for years now.
Ferrari will complain bitterly, but will probably more their manufacturing there soon enough. It has happened to the Italian and European bike industry, and is well under way in the motorcycle industry (China entering MotoGP and all).
Of course, Italy just needs to focus on product design and marketing, and leave manufacturing to those who can provide the necessary quality for the right price.
Necessary quality in a Ferrari can only be one - the top.
The day there is a Ferrari anyone can have, there will be no more Ferraris…
It reminds me going to Cerruti 1881 and finding out that the suits cost twice and are made in HK, compared against the the same brand you can see in Corso Verselli in Milano, IT. Same goes to Benetton, by example.
Maybe Ferrari can do some stuff in China (like they do it with merchandizing materials) but ultimatelly, IMO, it will never happen. The proud of ownership is the reason why people buy Ferraris, and if you take that (like it happened in America with the kits that where sold that looked like the Lamborghini Countach), you will take everything. Owning a Ferrari is not because of the speed - it’s because of everything it stands for.
Wouldn’t be the first time that the death of Western economies has been predicted. Remember Japan Inc?
China will need to move up the value chain in term of mfg. Otherwise you’ll see the mfg base move out of China, as it is already beginning to do for low end items. [/u]
China growth is only going to increase in the next few years. Europe is being hit now.
The US knows they are going to be hit very soon too (hence the meeting between Bush and the Chinese president)
It is not only about bringing jobs to China or producing there.
Take Italy. Italian were manufacturing clothes and shoes for all Europe. Now go to Italy and who do you see most now selling, producing clothes and shoes in Italy ? Chinese people.
Europe is starting to be hit economically now and we have no way to compete against 1 billion people and very low wages. So what to do ? focus on innovation ?
As I said in another thread, the future is not bright for Europe but nor for America.
[quote=“Gerard Baker in The Times, discussing the US economy,”][url=http://business.timesonline.co.uk/article/0,13129-2150167,00.html]Think of it another way. In an era in which China embodies the hopes and fears of much of the developed world, the US, with a growth rate of half that of China’s, is adding roughly twice as much in absolute terms to global output as is the Middle Kingdom, with its GDP (depending on how you measure it) of between $2 trillion and $4 trillion and its growth of about 10 per cent.
Even when you account for the fact that US growth is not going to continue at 5 per cent, but will revert to its trend of more like 3.5 per cent per year, you are still talking about an economy adding more than $400 billion in inflation-adjusted terms every year (not quite Brazil or Australia, but significantly bigger than Switzerland or Belgium).
That means that, on current trends, for at least the next decade the US will actually keep growing in total dollar or yuan numbers by a larger amount than will China (even if the yuan is substantially revalued, by the way). And beyond that ten-year horizon, can anybody really be confident that China will maintain its current rate of growth? (We haven
So far, I haven’t seen a centrally/highly regulated (Japan, China, and even the EU) economy deliver better performance in the long-run than more liberal economies. Economics are just too complicated and politics too tempting for any one or any few gov. agencies or persons. There is always some imblance being created.
BTW: My bother-in-law was saying that this ferarri was a copy of a limited edition - apparently 6 were built by Ferarri and a 7th appeared from China
Sharlee: . The US already went through much of this tranformation/restructuring in the 70’s & 80’s for many industries. Europe is feeling because for the first time there is much more open access to EU markets. In the US, those that could not compete went out of business. Those that could moved up the value chain, outsourced mfg. overseas or did both. Itay will need to do something other than makes shoes, or it will have to compete. A good start might be unwinding all of those restrictive labor laws - but I don’t think the EU has much appetite for that.
I agree with you that the US have a booming economy at the moment.
When I say the US will be hit too, it might be in 10 or 20 years. Unless you find an agreement to have more access to the chinese market and you can export there, and that both sides play fair.
Well no one can say what the future will be especially when there are such soaring prices for oil… that will make everything much more expensive, producing, freight etc.
I also agree that Italy will need to adapt and unfortunately Mr Berlusconi policy was to spend away and make italians live in dreamland. Now the new one Prodi will have to be very unpopular to get Italy back on the good way.
Elegua, you are also right to say that Europe has no appetite for less restrictive labor laws but this is anchored in our minds by centuries of oppression by kings and hard fought battles (for a health care system or even getting saturday off only). We do not want to let go what our grand parents fought for.
I know the world is changing but who would like to have less than their parents or grandparents ? This is all part of the challenging times we are going to live.
Give things time. Gradually wages in China will come up and the economy will diversify into services, etc, and eventually some other place can become the cheap labor capital of the world. Get the idea that economic success in China must be detrimental to economic success elsewhere out of your heads. Right now the U.S. and China are mutually reliant on each other, and that’s the way it will be for a long time, and guess what, there’s nothing wrong with that.
