[QUOTE="dk00111"][QUOTE="coolbeans90"]
That only is an issue because other automobile companies are manufacturing vehicles at a higher price than they are willing to pay for them in comparison. That is a supply issue. In other words the manufacturers are not making the vehicles available for a satisfactory price.
coolbeans90
I don't know why you edited your post, it made more sense before you edited it. :P Here's the thing, if the Chinese and Indian cars compete with other "cheap manufacturers" such as Kia, then there won't be much of a problem. But, should the "middle class manufacturers" such as Ford and Honda suffer because of it, then they might lower their quality in order to compete. Also, some projects require lots of money, which end up benefiting the customers. Hybrids, for example, need a good investment in order to succeed, and if companies lose lots of money because of these cheap cars, then technological advancement could also slow down.I thought my first post was perhaps slightly inaccurate. Returning to the subject, I don't see many people buying the absolute cheapest car on the market as soon as they become available. I don't see all too many Kias, and I think that the Chinese market would compete much with the Kia crowd. If they want other people to buy their cars, they'll need to establish themselves as quality automobile manufacturers. It's to a large degree why Toyota and other Japanese manufacturers have grown to the extent that they have. (gas mileage also...) It's also why American cars ave been getting a bad rep. (I do admit that I really like Ford though...)
You do raise an interesting point with R&D initially costing a great sum of cash, but paying off in the future. But as long as competition exists between companies, regardless of their nationality, profits will be lost in a price war. The only obvious remedies I see to this dilemma (lack of spare funds...) is a miraculous monopolization of the industry (which in my opinion would not be beneficial to consumers, and probably would completely remove incentive for innovation) or subsidies from a third party (Uncle Sam) to promote innovation. However, I would argue that due to competition, companies are constantly trying to one-up each other by product innovation.
Hmm, that's true. I guess it's up to the consumers to decide =\ 
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