China Is Now The World's Biggest New Car Market

I just sort of stumbled into the music business. I mean, I liked music a lot-- especially when I was high-- but by the time I started my own indie label I hadn't used any drugs in a decade. After a 24/7 stoned and alienated Vietnam War era college career, I went to live abroad for nearly 7 years. It was wonderful, but negotiating for 50 kilos of best quality black hash in Mazar-i-Sharif, smuggling rayon saris from India to Sri Lanka, coconut oil from Sri Lanka back to India and cases of Johnnie Walker Black Label from Pondicherry to Madras didn't exactly enhance any career trajectories or make me employable-- or so I thought. Eventually I settled down in Amsterdam, where I worked at a macrobiotic restaurant in a meditation center, de Kosmos, teaching astrology, darkroom work as a form of meditation and a course in bread baking without eating or speaking.

Now none of that exactly lead directly to becoming the president of one of the biggest record companies in the world. But it helped... a lot. When Seymour Stein, head of Sire Records, first hired me to work at Warner Bros (Sire's corporate home), he was probably the single most internationally-oriented executive in the music business. His phenomenal success as an A&R man had a lot to do with being overseas a lot and catching on to trends and specific artists making an impact there and looking promising for this market. Among his overseas signings were Fleetwood Mac, Depeche Mode, The Smiths, Erasure, The Cure, the Pretenders, Yaz, Falco, k.d. lang, Seal, The Cult, Ofra Haza, Barenaked Ladies, Soft Cell, artists that have brought in tens of millions of dollars in profits to TimeWarner. Never mind any personal traits Seymour may have seen in me, he wanted me at Sire because I had staked my bet (music biz-wise) on cutting edge, progressive, new wave music and because I understood, through life experience, something about marketing internationally. (I mean, all that whiskey I was selling Indians on the steps of the YMCA in Madras...)

Once I was at Warner Bros. I noticed that virtually the only experience most of the senior staffers had in regard to the world outside of America was on that vacation they had once taken to Hawaii. The overwhelming attitude at the company was that "we make records for the U.S. and whatever we sell abroad is gravy." I delicately tried pointing out that the gravy was started to runneth over and that we were now (then) selling more Madonna, more R.E.M., more Neil Young, more Jane's Addiction, more Lou Reed, more Eric Clapton, more Prince, more Joni Mitchell, more Rod Stewart, more Chili Peppers, more Enya, even more-- especially more-- Ramones outside of the U.S. than in the U.S. (True, we were still selling more Van Halen, Vince Neil, Bulletboys, Honeymoon Suite, Chicago and Damned Yankees in the U.S., but... feh!)

It was always incredible for me to watch how the senior VPs sat with rapt attention when some intrepid staffer returned from a grueling trip abroad-- no McDonalds, horrifying driving habits, funny languages-- to regale us all with their big adventures, only to find out that "doing international" had meant a 2 day trip to London!

There was no reason in the world, by any kind of corporate logic, that I would have made president of Reprise. There two dozen people more senior than me when it happened. But the fact that I had, again, made the right bet on the right genre-- if corporate rock were on the upswing I would have been the last person considered-- and it was now becoming abundantly clear that they had to have someone who knew something about the international marketplace. I kept an office in London and I never missed an opportunity to visit and work closely with our companies in Hamburg, Paris, Toronto, Milan, Tokyo, Hong Kong. I'm certain I was the only Warner exec-- aside from Seymour-- who had visited our subsidiaries in Cairo, Bangkok, Prague, Istanbul, Stockholm, Brussels, Hilversum, Bombay, Mexico City, Singapore, Madrid... My only regret was that we didn't have offices in Marrakech and Katmandu.

So what brought all this on today? The Guardian-- ironic that I got it there, of course-- ran a story that caught my attention: China Overtakes US as World's Biggest Car Market. Sales in China grew by 45% and fell in the U.S. by 21% in 2009.

China sold more than 13.5m vehicles last year, the official Xinhua news agency said today, compared with 10.4m cars and light trucks sold in the US, the lowest level in 27 years... China was not expected to exceed the US market until 2020 but the speed with which the recession affected consumers in the States combined with incentives from the Beijing government to help buyers accelerate the trend.

China's communist government cut sales taxes on smaller, fuel-efficient cars and spent $730m on subsidies for buyers of larger cars, pickup trucks and minivans. Stimulus spending on building highways and other public works also helped to boost sales of trucks used in construction.

The U.S. should have owned the international car market. I still travel a lot overseas. I see lots of Japanese cars and lots of German cars, but very few American cars. We were in Italy and Albania last month. I don't think I saw one American-car in Italy and only one in Albania. They made some bad choices in Detroit... when they were swimmin' in gravy.



UPDATE: On The Other Hand...

A friend of mine in Michigan says GM's partnership deals-- which are famous for manufacturing cars overseas, depriving Americans of jobs at home-- are paying off (for the company, at least) in China, as well as in burgeoning car markets in India, Brazil and Russia.