Pebble Beach is a famous car show in California where people display and admire luxury and classic cars. It's a big event for car lovers and collectors.
Monterrey Car Week is a week-long celebration of cars in California, where many events happen, including car shows and auctions. It's a great time for car fans to see and buy amazing vehicles.
Quail Lodge is a fancy hotel in California where a special car show takes place during Monterrey Car Week. It's known for showcasing beautiful and rare cars.
World premieres are when a new car is shown to the public for the first time. It's exciting for car companies because it gets people talking about their new models.
Few-off vehicles are special cars that are made in very small quantities. They are often unique and can be very expensive because not many are available.
The Lamborghini Reventon is a rare and very expensive sports car that looks like something out of a sci-fi movie. It was made in small numbers, which makes it special, and it has a really strong engine that helps it go incredibly fast.
When we talk about design, performance, and technical innovation, we're referring to how Lamborghini cars look, how fast and powerful they are, and the new technologies they use to make them better.
A dream car is a car that someone really wants to own because it's special or luxurious. It's often a car that people admire and think of as the best they could have.
The Lamborghini Urus is a high-end SUV made by Lamborghini, known for its sporty performance and luxury features. It's a big car that can go fast, like a sports car, but also has space for passengers and cargo.
The Lamborghini LM002 is a big, luxury SUV that Lamborghini made a long time ago. It was one of the first of its kind and had a very powerful engine, making it unique for its time.
A luxury SUV is a fancy type of car that is bigger and can go off-road. It usually has a lot of comfortable features and is made with high-quality materials.
Electrification means using electricity instead of gasoline or diesel to power cars. It's part of a move towards cleaner and more eco-friendly vehicles.
Hybridization means using both a gas engine and an electric motor in a car. This helps the car use less fuel and produce fewer emissions while still being powerful.
A plug-in hybrid is a type of car that can run on both gasoline and electricity. You can charge it by plugging it into an outlet, which helps it drive longer distances on electric power alone before switching to gas.
The Ford Model T is one of the first cars that many people could actually afford to buy. Made over a hundred years ago, it changed how people traveled and helped make cars a normal part of life.
Design DNA is like a set of rules that a car company follows to make sure their cars look similar and recognizable. For Lamborghini, this means having bold and unique designs that stand out.
The Lamborghini Countach is a very famous sports car that looks really cool and goes super fast. It was made a long time ago but is still loved by car fans today because of its unique style and power.
The Lamborghini Aventador is a high-performance sports car known for its speed and striking looks. It's considered one of the best supercars available today.
The GM Proving Grounds is a special place where General Motors tests their cars to make sure they work well and are safe. It's like a big playground for cars to see how they perform in different situations.
A camouflaged car is a car that has special coverings or patterns on it to hide what it looks like. This is done so people can't see the new design before it's ready to be shown.
Spy photography is when photographers take pictures of new cars that are being tested, usually while they are hidden under camouflage. This helps people see what new cars might look like before they are officially shown.
Buick is a car brand from America that makes different types of vehicles, including SUVs. They have been around for a long time and are known for their comfortable cars.
Car
Cadillac
Cadillac is a luxury car brand from General Motors, known for making fancy and high-quality vehicles.
could go on and on and on. But how good are these BYD cars as an example? Damn good. I've test driven
many of them, often alongside dealers from Europe, from North America, every one of them I ask, well,
if Hyundai's a 10 out of 10 in terms of value today in the market, where does BYD stack up?
And the numbers come in 99.5 right there. And I say, are you sure? Absolutely sure.
And then some of them say 10. Some of them say the BYD, how do they get there? Jason,
they have a million employees at BYD, 100,000 engineers are filing patents like it's going
out of style. They just, they have vertical integration. They move with speed. And yes,
they do enjoy enormous support from the central government, which is sort of the black box. How
much money are they getting? No one will ever know. You can go to China. I live there. The more
you dig, the less you know. It's just a black box. Like that's China. They have a saying in
Chinese. They say, the more you try to untangle it, the more it gets tangled. So
we won't ever know just how much, but I guarantee you that Chinese government is the hand behind
the success too. Nothing to take away from BYD as a car company that people work very hard and
they're smart, but they also have that extra juice from the government. And any new car company is
going to go through growing pains. And some of these Chinese companies are, whether it's
Quality and a JD Power China 2024 IQS study that you had referenced or labor standards
or over-dealering in some markets. But what I'm hearing, Michael, is I mean, when we know this,
you know, I've talked about it before, it's all about the long-term vision. When Toyota moved
from California to Dallas, they said it was a 100-year vision. I would guess that the Chinese
vision is a thousand years, correct? Yes. The Chinese do play a long game. They're very patient.
And they have this playbook, call it a China playbook that I call State Capitalism,
which is unfamiliar to most Americans, but it's very important to understand. What is State
Capitalism? They will target an industry, they being the leaders in Beijing and say, we want to
totally dominate this industry. The way we're going to do this, we're going to accumulate
massive capacity at home, create a fierce competition at home with price wars, and induce
our manufacturers to go global and win markets worldwide. And we've seen that happen and play
out in solar panels, in steel, in shipbuilding. Hell, when I first went to China, it was buttons.
Whatever the industry of the year is, they target it and they overwhelm it. And the bad news for
global automakers today is China's target is now automotive. They have capacity to supply half
the world's demand. They're shipping cars at a greater rate than any other country.
And their hell bent on absolutely dominating this industry into the future. So this isn't
Japan or Korea from before, where we had some serious competition. This is more like war.
There it is. You've described that State Capitalism arena before, and it comes with securing a
license with the help of a government sponsor. It's getting billion-dollar loans and building
plants with highly engineered technology, get another billion, build another plant, build
plants in different provinces, diversify, and then go after the rest of the world.
It seems like an unfair fight, doesn't it? It really does. People ask, well, how do we compete
with that? And that's one of the reasons why I have been an advisor to the folks in Washington
at high levels in the last several years. And the purpose of the tariffs that are in place right now
is not simply to protect our domestic industry, but more importantly to buy time,
number one, because if the gates are open, the Chinese would be in here big time. And then
more importantly than buying time, or at the same point, we also want to induce manufacturing
inside the United States. And you go, okay, wait a second, does that work? Does that happen?
Can that be successful? And the irony here is this is exactly what China did 25 years ago
when I was living there, Jason. They said, we don't have an auto industry. We're not competitive.
We're not leaders in technology. We don't have the management team. What do we do? Oh, first thing
we do is we're going to erect these massive trade barriers starting with tariffs. They had 100%
tariffs. They said, we don't want any imports. We don't want any. If you want to sell into our
market, you must manufacture inside China. And when you manufacture inside China, by the way,
you must form a joint venture and the Chinese side will have 50%. That was the cost of market access
into China. I see the current efforts out of DC with the tariffs in a similar vein. I think the
Trump administration says, if you want access to the US market, you better manufacture in the US
or Canada for access to those markets. Will it work? Only time will tell. But China's already the
sort of precedent for, yeah, actually, if you look around the world, Jason,
imports as a share of the market in Japan, about 5%. Korea, about 10%. China, 3%.
And people are up in arms saying, why does the United States have such high tariffs? Well,
half of our sales in the US last year were imports, half. So it's almost like we're late to the
party, didn't get the memo. Now we're applying the same principles as saying, oh, tariffs,
maybe tariffs can induce investments in manufacturing inside our country, just like
we've seen them do in Asia. And the collision of economic systems is truly a battle for the
future, isn't it? And right now, one side is moving faster, is thinking bigger, is building smarter.
Absolutely true. And we've got to get that sense of urgency like this. It's on, Jason. It's on.
So I mentioned building smarter as well. You've also said Western leaders and businesses
have to wake up right now. And that requires innovation, agility, investment in next generation
technologies. Is the West capable of doing this and applying the same amount of
resilience and persistence that the Chinese are doing?
We've been here before, Jason. 1941 Pearl Harbor. What was it? 1958 Sputnik moment.
We've been caught by surprise in the past. Chips were down. We were, yeah, we were outsmarted
and out hustled by our enemies, by our adversaries. Here we go again. China definitely enjoys supremacy
across the board, whether you're talking capacity of production or price costs of doing business
subsidies. So we have to first and foremost understand that this is genuinely an existential
moment. Just look at companies like Nissan right now, or even Honda that are finding themselves like,
BYD is bigger than both of those companies. They're finding themselves back on their heels,
reeling from the competition that they're facing and markets all over the world from the Chinese.
And it's from the Chinese perspective, it's a zero-sum game. As the Chinese like to say,
nix, you die, I live. And when they say, let's have a win-win situation, let's have a win-win
agreement here, it means Chinese side wins twice. So all kidding aside, having lived and worked in
China, Jason, for so many years, I want to double underline that the Chinese, when it comes to
business, are all business. There's no fooling around. They're tenacious as hell. They're unrelenting
and they're a force, the likes of which we have not confronted before. And as I lived here in
California, you know, it's relaxed. Hey, enjoy your life, take it easy. No, we look soft and we
look naive to the Chinese. That won't do. We have to up our game. Let's get into a little bit of your
personal history. I'm guessing that it was not your intended path to become an expert on China
when you went to the University of Michigan, you know, took marketing and finance. Although you did
do Chinese and Thai language, if I understand that correctly, right? That's right. I did. Yes.
But you grew up in a car family. That part was given. Certainly not a family focused on Chinese
cars, but a car family. Your dad was an incredible force in terms of documenting culture. Tell the
audience about that a little bit. Jim Dunn, larger-than-life guy, absolutely. So Car Spy,
as a teenager, my first job was to go with him as the getaway car driver, if you will. We'd go out
to places like Milford, Michigan, that GM Proving Ground's there, up to campus, Casing, Canada,
Ontario, out west to Death Valley, all in the pursuit of that next generation camouflaged car.
And he'd have his long lens Nikon camera out the passenger side window, and he'd give directions,
go faster or slower, speed up, go, Jesus, there's something to go. Let's go get that one. So
he was a man of action and always said, wherever the action is, go there. Don't sit in your office
and look at the ceiling and hope it'll come to you. It doesn't work that way. I just want to back
up because for those who are listening, may not understand what spy photography is. And spy
photography, if you look at any, I'm going to go back a little bit, the car and drivers and the
automobile magazine, there would be these camouflaged vehicles that were emerging out of, you know,
testing facilities, like you said, and it was for the automaker to make sure that the car could
run effectively and they would do a bunch of testing on it. That's what he was photographing.
He was photographing future product, right, stuff that nobody ever saw before, which by the way,
when you cracked open a car and driver or, or a road and track, you went, ah, that's what's coming.
Buick has an SUV coming. Okay. They've never done one of those before.
That was a pretty competitive business, wasn't it, Michael? Super competitive. He was the most
competitive person I ever knew. And he was hell bent on getting pictures of that next generation
vehicle before anyone else. He used to tell me, look, I write for popular mechanics. It was a
monthly at the time. How can I compete? Oh, I know how to compete. I'm going to get those photos of
those camouflage vehicles before anyone else. And we'd find ourselves up in trees sometimes.
We'd find ourselves, you know, out in Death Valley when it's 130 degrees and disweltering.
And sure enough, he'd get his, he'd get his target. He paid for the education of
our seven, seven kids in our family, a college education through that, that business of capturing
next generation photos. So the point is, what I learned from it is go to where the action is
and always think what's coming next. And at school at Michigan, the United States and China were
just normalizing relationships. I had a couple of professors there who said, Hey, if you want to
know what the big, big thing is in your life, it's going to be China. And that got my attention.
Who told you that? Who told you that? A couple guys, one is Michael Luxenberg, the other one is
Kenneth Lieberthal, two very high profile professors at the University of Michigan.
This is 1988. Okay. And it was 1990 that I graduated with a joint degree at the MBA and a
degree in Chinese. I knew how to speak Chinese by the time I graduated, went to China right out of
school, handed in my master's thesis, bought an airline ticket, 3000 bucks in an Apple computer,
went to China, landed and went to register my company with the Chinese authorities.
What was my company? I was, I don't know, I was going to bring American cars to China to
sell them into the Chinese market 1990. So when I registered the company, the cadre there said,
okay, everything checks out except for your business plan. You're going to sell American cars here.
There's no car market in China. We only have bikes. Bicycles. There's no income. There's no
private market. We make some cars, but they all go to government officials. So we're not exactly
sure what your intentions are here. And I thought, well, that's a good point. I didn't think it through
that well. But you know how life is, you just sort of hang around until that first opportunity comes.
That's 35 years ago, roughly. And you landed where in Beijing or Shanghai?
In Beijing. And in those days, wow, dusty streets, quiet, everyone in blue and gray,
no makeup, no style, no five star hotels. The airport was tiny, a two-lane road going back
and forth. China was poor, definitely poor, but you can sense they were opening up and had an
ambition. We want to be as wealthy and strong as Japan, as Germany and as the United States. You
could already sense it, even though they had nothing. How could you sense it? How did you know
that? They were hungry for information, hungry, curious, questions. How do we get better? They'd
even say, oh, we're a backward country. How do we get unbackward? How do you guys do it? Show
us how. We want to know. And that's that hunger and the curiosity was palpable
from the time I stepped into the country. So you founded what was then known as automotive
resources, Asia, right? Yes. So when did you get the sense that the tide was changing? You could
that moment where you said, oh, okay, things, the tables have turned.
Probably China did a fantastic job of having Ford and GM compete against each other for the
rights to invest a billion dollars into Shanghai to manufacture a high level, what they called an
executive car, an exclusive car at the time, which turned out to be a Buick. So GM competed
fiercely with Ford, went over three, four years of negotiation. Ultimately, China awarded that
contract to GM. GM started building Buicks that cost 40, $50,000 and private individuals began
to buy them. They thought, oh, the Chinese are getting to have money now. How are they doing
this? They were doing it by manufacturing other products and shipping them abroad.
But they got for the sense for the first time, oh, the Chinese have money and they have an appetite
for cars. It has set out in one of those five-year plans, I'm sure at one point, where they said,
well, we're going to dedicate our time and attention to these. And interestingly, Buick
had been there forever as an executive vehicle, right? The Americans were already in China for a
long time. Yes, last emperor's car back in the 1910s was a Buick. And GM went to China and said,
we won the negotiation against Ford. We're going to bring Chevy's. And the Chinese partner said,
no, no, no, Chevy's, no Chevy's, we don't want Chevy's. Oh, okay, we'll bring the Cadillac.
Oh, no, Cadillac's too ostentatious. No, that's not appropriate. Not Chevy, not Cadillac. Buick,
we want Buick here. So the GM people were like, really? Okay, Buick it is. And it turned out to
be spectacularly successful, Jason. Within the next 10, they started to sell millions and millions
of Buicks at profit there. There was a requirement, though, for Western automakers as they started
to tumble into the country and see the opportunity. And the requirement was you had to be with us,
5050, JV, which set the entire stage for where we are today, right? Absolutely, absolutely. So
global automakers looking at the China, oh, billion potential customers, oh, the greatest growth
market of our time, let's sell into the China market. So the Chinese said, no, you won't be
exporting your cars here. If you want to sell them here, you must manufacture in China. And if you
manufacture in China, you must partner with one of our state enterprises. So in the case of GM,
it was Shanghai Auto Industry Corporation owned by the city of Shanghai. In the case of Beijing,
it was the Beijing Auto Industry Corporation owned by the city of Beijing and so on. So if you think
back about it, the Chinese were so clever. Hey, bring your investments,
we'll own half your business, bring your suppliers, bring some more capital,
bring your technology while you're at it. And yes, you can sell some cars here,
we'll take half the profits and we'll take all of the technology transfer.
That's a quick look back at some of the personalities this year on Cars and Culture.
To see my interviews from this year, go to the Cars and Culture YouTube channel,
like and subscribe to see more than 200 interviews and more than 2000 videos.
Thanks for listening. I'm your host, Jason Stein. We'll see you down the road at the rest of 2026.
About this episode
Reflecting on the best moments of 2025, Jason Stein interviews Lamborghini's CEO Stephan Winkelmann and automotive expert Michael Dunn. Winkelmann discusses Lamborghini's blend of heritage and innovation, including their electrification journey and the success of the Urus SUV. Dunn shares insights on the competitive landscape of the global auto industry, particularly the rise of Chinese brands and their impact on traditional automakers. Together, they explore the challenges and opportunities shaping the future of mobility, making for a compelling discussion on the evolving automotive landscape.
