It’s a true invasion, almost like the one we have seen two centuries ago, when the Pacific Railroad was under construction, and the majority of the workers were flocking in from China. Today troves of young Chinese students being admitted to American colleges take their place. A decade ago when China was just beginning to open itself to the world, its students traveling every year to the US for higher education were already 60.000. Today they number over 235.000 according to US government records. They no longer come as cheap labor, to lay down train tracks. Their parents are part of the affluent society created by the Chinese economy’s explosive growth. They happily pay tuitions in the range of 40 – 60.000 dollars, and American Universities aggressively recrute them in their own country, even before they graduate from high school.
Once landed, the majority of them buy a car. Not the cheap hand-me-down Volvo their America collegues have received from their parents, or the ten year old Honda Civic purchased on the used car lot. Chinese boys and girls enter a dealership within a day or two of their arrival, cash in hand, to take possession of a great new Mercedes, Audi or Cadillac. Cars with a sticker price that in China is inflated by tariffs and taxes, while in the US is reduced to a great bargain in their eyes.
The result is a staggering 15,5 billion dollars worth of yearly business, more that three times the amount a similar group of young American students spend on cars in the same time. Over 50% of the transactions are for new cars, 30% are bought for cash. The average price of a transaction is 53,400 dollars for a new car, 35.000 for a used one. At this price level you don’t find Hyundai and Toyotas; you’re more likely to see a few Maserati and Porsche’s in the mix.
This business is so relevant to the American car dealers that some of them are now advertising directly in China, before the students start packing to travel abroad. And if the dealership is anywhere near a college, the presence of a sign that says: “We speak Mandarin and Cantonese” is becoming a must.