HANGZHOU, China ( TheStreet) -- China's Geely is getting a bargain with its $1.8 billion purchase of Volvo, especially when you recall that Ford ( F) paid more than $6 billion for Volvo in 1999. Thus ends a decade of failure for Ford as a new age of Chinese automotive ascendance begins. I'm not saying that Ford is an absolute failure, just that its stewardship of Volvo proved to be a failure. I still think that Ford is the last hope of the once-proud U.S. automotive industry. General Motors is still clinging to life thanks to a taxpayer bailout -- but government involvement may prove more of a hindrance than a help. And Chrysler has been rendered irrelevant once more after being swallowed by Italy's Fiat. Looking back on the consolidation phase of the 1990s that originally brought Ford and Volvo together, there was much talk of global consolidation. Ford was awash with cash (hard to believe now), General Motors was shopping for more acquisitions in Asia, Daimler ( DAI) and Chrysler had completed a merger (look how well that worked out), BMW had taken over Rover (only to unload most of it a few years later) and Nissan's ( NSANY) survival was in question (gross exaggeration in hindsight). Most of the merger talk back then focused on U.S. and European carmakers, with only an occasional nod to Japan's Toyota ( TM) and Honda ( HMC). No one said a word about China. Flash forward to 2010 and the global automotive industry looks radically different. Consider the rise and fall of Toyota, which topped Ford in 2006 and then GM in 2007 to become the world's biggest automaker, and inexplicably allowed its reputation to be sullied recently with massive recalls and disastrous PR.
The self-destructive acts of the global automotive leaders have created a perfect opportunity for Geely and other Chinese carmakers to join the race. Yes, there will be other carmakers coming out of China that the world markets need to be ready for -- Chery, SAIC, FAW, Dongfeng and Chang'an Motors, to name a few. Chinese automakers produce more than 13 million cars and commercial vehicles a year, making China the world's biggest car market, according to Bloomberg News. China's domestic car market, while vast, won't be able to contain the continued rapid growth in production. Get ready for the global push. Geely/Volvo is only the beginning. --Written by Glenn Hall in New York. You can also follow my Outrage on
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