Back in 2003 I predicted that the Chinese would, starting sometime between 2013 and 2023, export to the U.S. a basic four-door sedan at a low cost (June 2003 posting). Chinese-owned Volvo has announced that it will be the first company to bring a Chinese-made car to the U.S., but it will be a luxurious Volvo S60L (Bloomberg). The Swedish-made S60 costs over $30,000 so presumably the Chinese-made version won’t be cheaper than an average car.
Let’s look at some of the other failed prophecies in that old posting, just for humility’s sake.
I cited GM’s pension costs as a risk to the company. Wrong. GM was able to stick the U.S. taxpayer with those costs! (Though the shareholders were wiped out (Forbes).)
I said “If George W. had only declared war on urban traffic congestion instead of Iraq!” and proceeded to list some basic infrastructure that could have been paid for with the money I thought that we would spend on that Iraq war. Ridiculously wrong again. The Iraq war ended up costing so much that the things that I proposed wouldn’t have consumed 1 percent of the total. My statement is equivalent to “I wish I hadn’t bought an aircraft carrier complete with a hangar full of fighter jets because then I could have gone to Target to buy a T-shirt.”
A reader sarcastically commented “I suppose that you’re assuming oil is going to be $35 a barrel ten years from now.” Little did he know how close right that assumption, had I actually made it, would be! Bloomberg says a barrel of crude is $45, almost exactly the inflation-adjusted value of 35 2003 dollars.
Daihatsu is working toward a reasonably nice $5000 car (Reuters), but with production in Japan rather than in China.
Ford, Google, and some other companies are promising self-driving cars by 2020. So just before my prediction period runs out in 2023 the real market in the U.S. will be for $50,000 cars that are on the road 24×7 in some sort of Uber-Squared-type service.
Let me say that I have a great track record in making predictions, except regarding the future.
One thing that I didn’t anticipate was that the elites in the US discovered in 2008 that they could just create money, via debt and bailouts, and give it to politically connected people to spend. This explains some of the weird things pointed out in this post (the government can just create money and spend it on whatever, and they do) and really distorts the economy in all sorts of ways that are unprecedented.