It is achieving record sales there and may export to the US
AFP 1 June 2009
(SHANGHAI) GM’s overall future may look grim but half a world away from Detroit in Shanghai, business has never been better.
The US car giant is beating sales records in China and may soon be exporting Chinese-made cars to the United States.
‘I don’t think it makes much difference to us. Obviously, we’d prefer to have this restructuring done outside the courts,’ Kevin Wale, GM China’s president and managing director, told AFP in a recent interview. ‘We operate as independent joint ventures here in China so we would continue pretty much as we are today.’
While GM pares back at home, it may add a plant in China to meet its goal of doubling annual sales to two million within five years with products developed for ‘the most important growth market in the world’, Mr. Wale said.
That extra capacity could also help produce GM cars which, for the first time, would be exported from China to the US, under a proposal which the carmaker has reportedly submitted to US lawmakers.
GM has proposed shipping 17,335 Chinese-made cars to the US in 2011 and increasing that to 51,546 by 2014 - representing 1.6 per cent of its forecast 3.1 million cars five years from now, the Automotive News reported.
China led the world in car sales in April, and GM China’s joint ventures led the pack, with sales rising 29.9 per cent on year to 151,084 vehicles, driven by demand for Buicks and small Wuling ‘bread vans’ that cost less than US$5,000.
‘It’s definitely one of the market leaders here - in drastic contrast to their performance in the US,’ said Shen Jun, an auto analyst at Roland Berger.
GM’s first Shanghai sales office opened in 1929, boasting: ‘Buick owners are mostly the leading men in China.’ Pu Yi, the last emperor, revolutionary leader Sun Yat-sen and premier Zhou Enlai all owned Buicks.
But that history is barely known, allowing GM to recast Buick as a car for China’s young and fast- growing middle class.
‘Volkswagen has good prices and good quality, but their cars look very average, not unique,’ said Li Pengxiang, a 29-year-old telecoms project manager, referring to China’s No 2 carmaker. ‘These new (GM) models look fresh and suit young people.’
GM has earned a reputation for savvy marketing with moves like enlisting Prison Break star Wentworth Miller - a top celebrity in China despite the show never airing here legally - to star in its latest campaign, Mr. Shen said.
‘They think they are doing much better than the parent company in the US,’ he said, saying that GM’s success in China boils down to smart decisions, good timing and luck that has put it far ahead of US rivals Ford and Chrysler.
GM teamed with China’s largest carmaker Shanghai Automotive Industry Group (SAIC) in 1997 - foreign carmakers here need a local joint venture partner - after SAIC rejected Toyota and before Ford could sign a deal, Mr. Shen said.
Tension among joint venture partners is common, but GM and SAIC are known to have unrivalled chemistry, according to Zhu Junyi, an auto analyst at the Shanghai Information Centre.
1 comment:
Struggling GM thrives in China
It is achieving record sales there and may export to the US
AFP
1 June 2009
(SHANGHAI) GM’s overall future may look grim but half a world away from Detroit in Shanghai, business has never been better.
The US car giant is beating sales records in China and may soon be exporting Chinese-made cars to the United States.
‘I don’t think it makes much difference to us. Obviously, we’d prefer to have this restructuring done outside the courts,’ Kevin Wale, GM China’s president and managing director, told AFP in a recent interview. ‘We operate as independent joint ventures here in China so we would continue pretty much as we are today.’
While GM pares back at home, it may add a plant in China to meet its goal of doubling annual sales to two million within five years with products developed for ‘the most important growth market in the world’, Mr. Wale said.
That extra capacity could also help produce GM cars which, for the first time, would be exported from China to the US, under a proposal which the carmaker has reportedly submitted to US lawmakers.
GM has proposed shipping 17,335 Chinese-made cars to the US in 2011 and increasing that to 51,546 by 2014 - representing 1.6 per cent of its forecast 3.1 million cars five years from now, the Automotive News reported.
China led the world in car sales in April, and GM China’s joint ventures led the pack, with sales rising 29.9 per cent on year to 151,084 vehicles, driven by demand for Buicks and small Wuling ‘bread vans’ that cost less than US$5,000.
‘It’s definitely one of the market leaders here - in drastic contrast to their performance in the US,’ said Shen Jun, an auto analyst at Roland Berger.
GM’s first Shanghai sales office opened in 1929, boasting: ‘Buick owners are mostly the leading men in China.’ Pu Yi, the last emperor, revolutionary leader Sun Yat-sen and premier Zhou Enlai all owned Buicks.
But that history is barely known, allowing GM to recast Buick as a car for China’s young and fast- growing middle class.
‘Volkswagen has good prices and good quality, but their cars look very average, not unique,’ said Li Pengxiang, a 29-year-old telecoms project manager, referring to China’s No 2 carmaker. ‘These new (GM) models look fresh and suit young people.’
GM has earned a reputation for savvy marketing with moves like enlisting Prison Break star Wentworth Miller - a top celebrity in China despite the show never airing here legally - to star in its latest campaign, Mr. Shen said.
‘They think they are doing much better than the parent company in the US,’ he said, saying that GM’s success in China boils down to smart decisions, good timing and luck that has put it far ahead of US rivals Ford and Chrysler.
GM teamed with China’s largest carmaker Shanghai Automotive Industry Group (SAIC) in 1997 - foreign carmakers here need a local joint venture partner - after SAIC rejected Toyota and before Ford could sign a deal, Mr. Shen said.
Tension among joint venture partners is common, but GM and SAIC are known to have unrivalled chemistry, according to Zhu Junyi, an auto analyst at the Shanghai Information Centre.
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