It makes no sense to talk about bruto income, it makes well sense to talk about netto income, because that is the real salary you get every month.

In Europe, for example in a high income country like Belgium, the country’s average income is bruto 2.648 euro per month, that is € 1.740 netto.

We can safely assume that a car factory worker, makes the average national income, namely € 1.740 netto per month, that is 1.740 * 1.3 (1 euro=1.3 dollar) = 2.262 USD, taking into account one month salary as the yearly vacation money, we come to the conclusion that:
A Western European car worker makes about netto 2.500 USD per month.

Now the interesting part come here:

Take China as another example, in 2013, a Chinese car factory worker makes about 4.000 RMB (including yearly bonus) = 650 USD per month.

So a high income Western European country’s car worker makes about 2500/650 = 4 times more salary than a car worker in China.

But, we all know, the living standard in W.Europe is much higher, which means daily life articles are more expensive than in China. If we take only a factor of 1.5, which means you can buy the same article with 1 USD in China but 1.5 in W.Europe, than in PPP term (Purchasing Power Parity), a Chinese car worker makes about 650*1.5=975 USD per month.

Then 2500/975 = 2.5, which means in reality, a W.European car worker makes only 2.5 times more salary than a Chinese car worker.

According to the Chinese economic growth of around 8% per year, in 8 years time from 2013 to 2020, the Chinese car worker’s salary will double to 2*975= about 2.000 USD, suppose W.European car worker will get their salary increased to 3.000 USD in 2020, than in 2020, the difference of a W.European car worker towards a Chinese car worker is only 3000/2000=1.5 times.

Above estimation does not yet consider the very high possibility that Chinese Yuan (RMB) will increase at least 20% t0 25% against US dollar. Currently in 2013 1 USD = 6.2 Chinese Yuan, in 2020, it might be: 1 USD = 4.5 Chinese Yuan.

Then, the consequence for Chinese car industry comes:
Producing cars in China in 2020 is not so cheap more compared to highly developed countries like West Europe, will then a lot of foreign car makers move out of China? Some will, some will not, because Chinese car market in 2020 might reach 30 millions new cars sales, still the far biggest car market in the world.

Also, in 2020, the Chinese brand cars like Chery, Geely, BYD, Brilliance and many others, might grow so strong to be equal to world top level car makers.

The coming 8 years will be very interesting to watch, the world car industry development.


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