TRAVERSE CITY, Mich. -- Despite the glum outlook for Chinese automaker investment in the U.S. during the trade dispute, Chinese suppliers are alive and well, and deepening their roots in the North American industry.
Chinese-owned parts makers have invested in the Midwest and are critical suppliers here, reports Michael Dunne, founder of ZoZo Go, a consulting firm that specializes in U.S.-China automotive business.
Those companies include Yanfeng Automotive Interiors, which acquired holdings from the former Johnson Controls, and Fuyao Glass America, which set up a vehicle glass operation in the former General Motors Moraine Assembly plant in Ohio.
"Suppliers that have grown up supplying Ford, General Motors and Chrysler in China feel like they're right at home in the Midwest now," said Dunne, who will speak Wednesday afternoon at the 2019 CAR Management Briefing Seminars. "They will continue to invest and grow in North America.
"They know that in order to win global contracts, they have to be in the United States."
It is a tale of two industries, Dunne points out. The outlook for Chinese auto manufacturers that would like to sell vehicles to U.S. consumers is dramatically different.
Some of those companies have halted in their march to the U.S., chilled by two big barriers: First, the Trump administration is threatening China with import duties that would make Chinese-made vehicles uncompetitive, and as a result, some plans have been put on ice. Second, a downturn in the Chinese economy has made some businesses there less enthusiastic about spending money overseas.
Last week, the White House threatened an additional tariff on $300 billion of Chinese imports.
In the current atmosphere, Chinese direct investment in the U.S. plummeted to near zero last year. Dunne reports that some Chinese companies are studying the feasibility of setting up operations in Canada and Mexico, instead of the U.S.
But Dunne believes the lull in Chinese automotive investment in the U.S. is temporary.
"These are companies with a very long-range view of business planning," he said. "Their competitors in the U.S. might be wondering if the threat is over.
"The reality is, yes, they're stalled. But I wouldn't bank on that for long."
