Prior to telling the world that it just might export cars built in China to the United States, General Motors presented its plans for the Chinese market during a press conference held in conjunction with the start of Auto Shanghai 2013. For most, the fact that The General is a force to be reckoned with in China is no secret. And the takeaway from the automaker’s executives about its plans for the future is more. More of everything.
“We are at an important point in our history and the industry’s history in China,” said Bob Socia, President, GM China, and Chief Country Operations Officer, China, India and ASEAN. “Last year, the vehicle market reached a record 19.4 million units. We expect industry sales to grow another 7-8 percent in 2013.”
Outside of the most immediate past, GM has been the undisputed sales volume leader among global automakers in China for the past eight consecutive years. The automaker sold its 1 millionth vehicle in China on the weekend of April 20th — marking the earliest time in its history to reach the sales milestone in a calendar year. And going forward, GM will continue to aggressively invest in products, plants, dealers, and people.
General Motors and its joint ventures will launch 17 new and upgraded models in China this year. Some of these include the Chevrolet Cruze hatchback, the new Wuling Sunshine, two new Jiefang light-duty trucks (S230 and F330), and the Opel Insignia Sports Tourer, Zafira Tourer and Astra GTC.
Interestingly, Mr. Socia explained that the company’s focus “is on luxury vehicles and SUVs going forward”, and that “Not long ago, both were considered niche segments”, but “are now mainstream and growing rapidly.”
To meet the growing demand for luxury vehicles, General Motors is in the process of offering the entire Cadillac global vehicle portfolio in China, with the brand adding one locally-produced model per year through 2016. The brand has been struggling in China since only one of its vehicles (the SLS sedan) was produced locally, with the rest of the lineup being imported, and thus charged hefty foreign goods tariffs leading to the pricing of the vehicles out of the market. Earlier this year, Cadillac introduced the locally-built XTS and the refreshed SRX — Cadillac’s best-selling model in China (by far).
As it brings Cadillac manufacturing to China (for the Chinese market), General Motors is also planning on growing its dealer network, and expects to increase Cadillac sales from 30,000 units in 2012 to 100,000 units in 2015. The brand’s longer-term goal is to be responsible for 10 percent of China’s luxury car market by 2020.
On the SUV front, The General currently offers
five six SUVs in China: the Buick Encore and Enclave, Cadillac SRX and Escalade, and Chevrolet Captiva, along with the Opel Antara. It plans to introduce another nine new or refreshed SUVs in China within the next five years.
Exporting From China
In 2013, General Motors plans to export a record 100,000 – 130,000 vehicles from China, and is “looking beyond China’s borders to sell its locally produced vehicles.” Don’t rule out the possibility of The General exporting cars to the U.S. from China.
GM’s current manufacturing plants in China are running at “near maximum capacity”. The General will continue to add capacity to keep up with demand for its products.
GM and its joint ventures opened two new manufacturing facilities in China in 2012, and will open four more plants in the country through 2015. The four new plants will allow GM to increase Chinese manufacturing capacity by 30 percent to roughly 5 million units a year, while creating about 6,000 new manufacturing jobs.
Improving and expanding its product portfolio while growing its manufacturing base won’t do a business much good without the adequate retail presence to sell and service its vehicles. So to meet growing demand for its products, GM will expand its dealer network by adding 400 dealers in 2013 alone — bringing The General’s total dealer count in China to 4,200 by the end of the year. By 2015, GM plans on having 5,100 dealers nationwide in China — which is more outlets than it has in North America. The focus is on expanding westward and to China’s tier 3 and tier 4 cities in the country’s interior.
By 2017, Shanghai GM and SAIC-GM-Wuling will open a total of 1,000 dealers in western China.
Currently, GM and its joint ventures have over 55,000 employees in China — a number that has more than doubled since 2004. And ensuring that GM continues to make desirable products is up to the company and its employees.
“GM is a car company, but we are also a people company,” said Socia. “You can’t build great vehicles without great talent.”
As such, “GM continues to hire local talent, with a focus on design, engineering, R&D, manufacturing, purchasing, and sales and marketing.”
The GM Authority Take
Understanding that there is still a sizable amount of negative sentiment towards China (founded or not, and for whatever reason), the progress The General has made in The Land of the Red Dragon is definitely impressive. And in that regard, it’s great to see GM having its business buttoned-down and doing well there. However, the existence of GM’s various joint ventures in the country are a bit disconcerting, as the automaker is splitting its profits with its “partners” while sharing knowledge and technology with Chinese automakers that sometimes give off the impression of chomping at the bit to dump GM and sell their products globally… but perhaps that’s just the unfounded paranoia speaking.
Here’s the way Mr. Socia summed up GM’s plans for the future in China: “With the support of our great partners and by focusing on our products, plants and people, GM looks forward to remaining a leader in China.”