The biggest news in the auto industry is Detroit's comeback with a vengeance in 2011. The new GM reclaimed the title of the world's largest carmaker in terms of units sold - over 9million last year, and with a handsome profit. Ford sold over 2million cars in the US last year, while it hasn't released total global sales yet. But its US$20.2billion profit is the second largest in company history. Even the perennial lame-duck Chrysler eked out a small profit for the first time since 1997.
It's necessary to point out that Detroit's turn of fortune could not have been achieved without contributions from China. Take GM as an example, which has been highly successful in China for the past decade. It sold close to 30per cent of its global production in China, a record 2.55million units, more than the 2.5million it sold in the US. The joint venture between GM and SAIC Motor - Shanghai GM - has become the most successful auto operation in China, with several of its models regularly making the monthly top-sellers' list.
In the US, GM's leadership position in market share is threatened by Toyota, but in China, GM is battling Volkswagen, with Toyota way behind. For two consecutive years now, GM's Buick Excelle has been the No 1 sales model in China. Buick, a beleaguered 108-year-old brand whose owners' average age in the US is 58, has received a second lease of life in China, where it is seen as a trendy upscale brand for well-heeled younger white-collar workers. Today, Buick sells more cars in China than in the US.
The auto industry is probably the most prominent example of how the two countries' economies are inherently interwoven, and how American companies can co-operate with, and benefit from, a rising China. Today, car manufacturing is all about scale, and there is still much economy of scale to be exploited by joining hands across the Pacific.
Interestingly, Chinese and American people have much in common in terms of car tastes. Unlike the Europeans and Japanese, who prefer boxy little hatchbacks, both Americans and Chinese love large family-size sedans. Look at the list of the top 10 selling cars in the US: half of them also sell like hot cakes in China. It makes great sense to develop common models for the two markets based on the same platform for car frames and power train.
