China

China is quickly replacing the U.S. as the consumer capital of the world.  

In March, the Chinese bought 1.1 million vehicles, while Americans bought fewer than 900,000. According to 2009 estimates, China's car sales could top 11 million.  That's a staggering amount for a developing country.   When you have such a huge market, there are bound to be some strong companies.  

There are two Chinese companies that I think are threats to LG, Samsung, and Hyundai.  

The first is Haeir.   They are a consumer electronics manufacturer with a wide range of products.  Haeir makes everything from refrigerators, washers, air conditioners, to beer dispensers and cell phones.   Although a lot of manufacturing is automated, the labor in China is still dirt cheap.   The average assembly line worker in China earns around $200 a month. Therefore, Haeir has an incredible price advantage over LG or Samsung.   

The second company is BYD.  BYD is one of the world's leading manufacturers of batteries. They sell cell phone batteries to Nokia, Motorola, and Samsung.  In addition, they are developing batteries to store solar and wind power.   Warren Buffet is so confident in this company that he invested $230 million for a 10% stake.   Also, since 2003, BYD has been selling cars.  They've already developed an electric plug-in hybrid.    The selling price of an F3DM will be around $16,000, which is cheaper than most gasoline-powered automobiles.   How can Hyundai compete with them? 

I believe this is a crucial period for several Korean firms.  Samsung dethroned Sony a few years ago.  Will Haeir dethrone Samsung?  

Will Hyundai Auto's fate be the same as the British brands in the late 1970s?   England used to be a top manufacturer of cars with brands like Jaguar, MG, Cooper, Triumph, etc.  However, the high cost of labor and hard-core labor unions spelled "death" for these once proud and successful companies.  A labor union strike at Hyundai Auto seems to be an annual event.   

Do you think these companies will survive?