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General Motors Open To Exporting Vehicles From China To The U.S., Says GM China President

During a press conference at Auto Shanghai on Saturday, General Motors announced its future plans for the Chinese market. Some of those plans include launching 17 new and upgraded models in China this year, adding 400 dealerships in China (also this year), continuing to hire locally to facilitate design, engineering, R&D, manufacturing, purchasing, along with sales and marketing functions, and building four new plants in China by the end of 2015 to produce five million vehicles annually. But not all of that production will stay in China, however, as The General plans to export between 100,000 and 130,000 Chinese-built vehicles in 2013, thereby setting a record, and planning for more.

Our friends at Autoblog caught up with GM China president Bob Socia, and asked if the automaker is planning to export vehicles from China to the United States. His response might surprise you:

“It could very well happen. It could very well happen. You know, I’m not sharing any plans with you, but we try to keep open as to what makes sense. And Tim [Lee – GM president of international operations] is the right guy to talk about your manufacturing footprint. If it make sense to tool up a vehicle in one location as opposed to two, from an economic perspective, Tim will say that’s what we should be doing. We’re open to be doing that. There’s no reason why we can’t be exporting to the States, and obviously the States are exporting here.”

General Motors president of international operations Tim Lee. Above - GM China President Bob Socia

As AB points out, the role of the joint venture between General Motors and SAIC known as the Pan-Asia Technical Automotive Center (PATAC) has been growing. The organization’s engineering and design work has been particularly increasing with the Buick brand (it designed the new Riviera concept), and Buick is very popular in China mostly thanks to a single cheap (and rather outdated) model known as the (original) Excelle. So could it be that Chinese-built Buicks will be among the first cars to be exported to North America? Importing Buicks from overseas wouldn’t be a first for the Tri Shield brand, given that GM is importing the new Encore subcompact crossover into the United States from South Korea.

To note, The General is currently exporting Cadillacs from North America (U.S., Canada, and Mexico) into China — a practice that’s costing the luxury brand sales in the burgeoning Chinese market thanks to high import tariffs set out by the Chinese government on imported vehicles. That’s one of the reasons that GM is planning to build Cadillacs locally in China (for China), by building one new Cadillac a year in the country beginning in 2013 through 2016.

When AB asked whether GM currently has any plans to export from China to the U.S. at this time, it was told “No”.

The GM Authority Take

We don’t see how this will not turn into a public relations disaster for GM in the United States. Heck, we’ve all heard and/or seen the various nicknames (Chinese Motors, anyone) and commentary (“bailed out to import cars from China”). Suffice to say that if GM ever begins to do this, it can wave goodbye to any kind of patriotism the American public still has in the automaker or its brands.

But outside of the nationalistic nightmare that importing Chinese-built cars will undoubtedly bring, we’re not sure that importing Buicks from China makes sense for GM. For starters, Buicks are a (semi) luxury product that share their general engineering and vehicle architectures with mainstream (Chevy and Opel) models. As such, they carry higher profit margins for GM on a per-unit basis. In that regard, GM should have no problem continuing to build Buicks in North America for the North American market, rather than importing them for the remote possibility of making more money per unit (thanks to cheaper Chinese labor) while decreasing sales volume thanks to the ensuing PR disaster.

On a sidenote, it is entirely possible that Lee and Socia want to keep all options open (what business wouldn’t?), but GM needs to send its executives to the “dancing around questions 101” class (we hear they’re offerred in Washington D.C.) — otherwise, the grandiose momentum built up by Buick in the United States over the last two years will vanish overnight.

To make a long take short: any possible upside to cheap Chinese labor will likely be instantly wiped out by all the negative publicity of importing Chinese-made American cars… which in and of itself is an enigma.

GM Authority Executive Editor with a passion for business strategy and fast cars.

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Comments

  1. If China has High tariffs on cars from America. Why not just retaliate and tax stuff imported from China. Europe has the chicken tax China could have the Walmart tax.

    Reply
  2. I do not understand. We import cars from everywhere:Germany, Korea, Japan. We import most everything else from China. Why would this be any different from that?

    If they did import they would be top quality vehicles. Very different from home grown chinese cars.

    Reply
  3. How quickly guys like those running GM (and too many corporations) turn their backs on profitable markets–and vehicle segments–all to chase growth somewhere else.

    Reply
  4. Don’t rule it out. Buick Encore is built in South Korea but that’s hush hush on the dealer side of things.

    Reply
  5. Great – now the “new car smell” will be replaced with something hideous like a Harbor Freight store. If the vehicle production is in China, then that means a very significant percentage of the components will be made there. Maybe the public at large will not care.

    Fact is, China has significant “voting rights” when it comes to GM’s sourcing process and there’s not a hell of a lot anyone can do about it. Meanwhile, China is taking every opportunity to extract intellectual property from GM and GM hands it over without a fight.

    Unless GM handing the company over to China has some well-hidden long-term strategy the rest of the world just isn’t bright enough to identify, all of this corporate pandering to China is going to devastate GM in the long run.

    What… does GM really think that IP handed over to PATAC won’t be almost instantly transferred among the rest of China’s government-ruled auto industry?

    Reply
  6. My take. This GM executive is obviously just talking trash. First of all. South Korea is a country that already has a reputation for buiding good quality vehicles these days like Hyundai an Kia. Hence, a chevy built small car like the Orlando or Sonic can’t do any harm with brand reputation.

    China, on the other hand is mostly known for building below-par quality vehicles. Hence it would be a massive error! To build any vehicle in china know matter what, and export it to any premium vehicle manufacturing country, especially the USA.

    These narrow minded GM executives must observe, that brand credibility is what sells vehicles currently and in the future. Therefore, if GM builds Caddys or buicks in China just keep the build quality up, but just sell them there! High-end Vehicles built in the USA, Europe Australia or Japan can be sold anywhere.

    To those GM executives, don’t F.up the reputation you build for GM high end or any GM name plate for that matter. Whats build in China sell in China and leave at that.

    Reply
  7. Sorry, I meant “no matter what.”

    Reply
  8. Can we please put this into perspective? We are talking about 100k cars. How many cars did GM sell worldwide last year? These exports will most likely go to the euro market to replace the production of plants skated for closure. Aside from his responsibilities as international operations president, Lee also serves on the Opel supervisory board and is the head if Chevrolet Europe.

    Reply
  9. Great, GM just getting out of one mess now looks to be trying to get into an even bigger problem. Wise up guys or it might really end up being the end of things.

    Reply
  10. What kinda coolaid is this guy drinkin, I want some…

    Reply
  11. I’ve always thought one day a manufature will do it all from 800cc cheapies to nice V8 muscle & everything inbetwen the day is nearer & it will come, giving consumer choice & manufatures profits.

    Reply
  12. Shanghai GM is currently exporting the Chevrolet Sail to America, i.e. to Spanish speaking countries on the Pacific Coast, like Chile, Peru, Ecuador, and Colombia.

    As to the northen part of America, the GM manager stated clearly that there are currently no plans, but — applying the principle “never say never” — did not rule out that this might occur in the future.

    Interesting to see how here people reject indignantly the “give and take” in international relations.

    Reply
  13. Mind you, 40% of all Chevrolet built worldwide are built in South Korea (ROK).

    Reply
  14. GM has to pay off ALL of it’s government loans before it EVEN MENTIONS
    this option. Of course, it’s been on the table all along, and GM even
    runs ads on PRO COMMUNIST nationalistic TV shows celebrating the
    oppression and possesion of it’s citizens. GM has given China concesions
    to keep doing business there – and I believe the concensus here is that
    they’ve wisely done so ( albeit with those TV spots, crossing the line ) to
    gain big business in the world’s largest automobile marketplace since
    2010.

    Slipping the lip, and even mentioning the prospect of importing Chinese-
    built GM cars is insane. I totally agree with GMAuthority.com’s writers
    in these facts and opinions. My Gawd, people – pay off those gov. loans
    before you launch into a tornado of conflict like they’ve opened up!
    SHEEESH!

    So far, Americans associate cheap Chinese labor with cheap product.
    Even though products like the iPhone and iPad are made there,
    the people don’t give as much thought as to who made them versus
    big heavy industrial products LIKE CARS AND TRUCKS!

    It’s very tempting for GM ( and everybody else ) to rake in profits
    from Communist slaves building your cars – DON’T GO THERE,
    PERIOD! The Volt is the first concern. Just think, build them
    in Shanghai and ship them here, and an EREV/PHEV which
    outperforms rivals from Toyota and Ford could cost $30,000.00
    before rebate, instead of $42,000. Forget it! It won’t fly. As
    Alex so wisely says – it’ll be the PR nightmare from Hell for GM.

    I , like you, sadly have products built in China in my home.
    NOTHING – and literally, NOTHING big is built in China. I have
    paid more, and sacrificed to help American workers by denying
    paying big dollars for Chinese-made goods. I draw the line at
    my cell phone. Anything more expensive? – If it’s made in China
    I just say NO!

    Please do the same. And please support American workers
    by buying American-made products whenever you can.

    My Volt is MADE IN USA ( and engineered in USA ) and I would
    not buy one that is not.

    Reply
    1. Only Ford still has government loans that need to be paid back.

      GM and Chrysler have no government loans.

      Reply
      1. GM payed back the money April 21 2010.

        Reply
      2. Check again. Bubba

        Reply
        1. Check what again, Steve?

          Reply
      3. why the negatives? Is not what I said just the facts?

        Reply
    2. Pay attention to your blood pressure, man!

      Your warrior excitement may get you a heart attack or a stroke!

      Reply
  15. Unions here in the USA have gotten too strong, too fat
    and too big. Let’s all admit it. Concessions they’ve made
    have really paved the way for much of GM’s current recovery.

    It’s just like Washington D.C.. NOBODY, and I mean NOBODY
    will get their way 100% of the time. We all have to compromise
    something. GM is accused of many worker atrocities in
    South America. Here in the USA, the unions have run
    roughshod on GM for decades, resulting in poor quality cars
    and bankruptcy which came a cat’s whisker from mass
    unemployment. There has to be compromise – U.S. UAW
    has to bend and not break.

    Cheers to the ones who realized changes needed to be made.
    My hat is off to those who went to the table with GM and
    realized having a job is better than unemployment and
    massive plunges in our economy. We can get this done….
    Continue to build the cars for China in China – and
    build the cars for the Americas in the Americas. And for
    God’s sake, fairly compensate workers in S. Korea and
    S. and Central America for the fine job they do in
    building quality, world-class vehicles, or GM – you will
    cease to exist.

    It’s tough. It’s hard. But concessions from both sides
    must come – to fend off the lure of cheap labor
    in Communist slave countrys like China.

    Reply
    1. “Unions […] in the USA have gotten too strong”, but in the other message, you demand support for the workers? And complain about “communist slaves” in China?

      Quite confused, eh?

      @James

      Reply
  16. With dozens of differing models in different countries suited to differing tastes, surly the only thing stopping this is if it could pass the relevant safety tests for each country it wishes to be sold in. Here is a fantastic business oppotunity to sell additional cars in new markets whilst also opening up new segments and gaining additional market share.

    Reply
  17. I want to state something for the record.

    I will only buy American cars. And I will only buy from GM or Ford or Chrysler.

    I will never buy any cars built outside of NAFTA. And I do try to buy American built where I can but we all know that buying 100% American is possible. I always say we are very lucky we still have any cars built here. They are one of the last commodities even available that are built here.

    However I am not the majority of Americans. They do not care where what they buy is built. Evidence is all around us.

    So I will repeat. We will be seeing cars imported from China. And they will come from one of the major brands such as GM/Ford/Toyota/MB/BMW. And they will be top quality. China can build great stuff, they just need the quality specifications and the “direction” from outside China engineers to assure they build to spec.

    And Americans will buy them. Overall Americans do not care where there stuff comes from because they will buy the most affordable product they can.

    Reply
    1. Sorry I meant IMpossible

      Reply
  18. Here we go again. Importing their stuff with no tariffs but ours has it going there. What the hell is our gov doing..nothing as usual. Im not buying an import from CHINA so I better get my volt now while its still made here. That is probably one of the tricks they will use to get the pricing down from 40k. Unbelievable. Its one thing to build them there for the so called growing market there but to ship a bit of them back here which ultimately takes more jobs away locally. I don’t what color lipstick they put on that pig, the real intent is corporate profit and such not employing locals.

    Reply
  19. WOW, you bloggers are clueless!!!!! 100,000 vehicles being exported will represent 2% of the chinese production capacity, AND, these vehicles will not be imported to America. Jesus, buy a fricken clue before you spill diarhea from your mouths, you ignorant fools

    Reply
    1. @Dave Before calling anybody “clueless” and “fools” it might be apropos to fully wrap your mind around the possibilities and repercussions of this development.

      The 100,000 vehicles being exported now are going to South America and India. That’s a developing nation exporting cheap products to another developing nation… But what are the benefits of exporting from China to the US?

      For starters, the image tradeoffs alone will have negative repercussions for GM and its products. An American company, bailed out by American taxpayers, taking production out of America and instead importing from China.

      But let’s image that there will be zero image- and PR-based aspects to GM’s Chinese importing practices; let’s say everyone loves the idea and buys the cars by the boatload. Do you realize that GM will have to split the profits on the cars it exports with its mandatory Chinese joint venture partner SAIC? Hence, it will actually be making less per vehicle, and U.S. demand (and subsequent profits) for GM’s vehicles will be split with a chinese company?

      Those are the two biggest negative by-products of what we’re discussing here. Ultimately, the traditional best practice of manufacturing locally to satisfy local demand still stands today, as it did ten, twenty, and thirty years ago.

      Having read this, I hope you yourself now have a “clue”… and have become less ignorant.

      Reply
      1. Alex, I agree with what you say but EVERYONE already imports from everywhere. KIA and Hyundai are primarily imported. As are BMW, MB, Lexus, etc. Yes they have two plants now and more will be built here but primarily they import. And people do not care. They still buy them.

        I do like the locally built mantra but once the chinese imports start coming in at reduced prices others will have to follow. Kia/Hyundai sell primarily due to a huge price advantage. Yes they are now nice vehicles but they are the value end of the market.

        I had not thought of the fact that GM would have to split the profits but so will every non chinese company exporting cars and I do believe that a 100% Chinese company will have a very hard time convincing the US buyers they are a quality product. Hopefully the profit split will keep them from coming but China government will want to export cars someday and they will find a way to make it work.

        Reply
        1. @62vetteefp Well, to a point… everyone imports from everywhere — except cars by American automakers from China into the U.S.

          Also, the price advantage once enjoyed by Hyundai and Kia isn’t as large (or really existent) as it once was:
          – The difference between a Sonic and a Rio, for instance, is $600 (in Kia’s favor)
          – The difference between a Malibu and an Optima is $650 (also in Kia’s favor)
          – The difference between an Equinox and a Sorento is $50 (in favor of the Kia).

          My question surrounds the real, tangible benefit of importing vehicles from China into the U.S. It seems that, between the splitting in profits and ensuing negative PR, there is nothing to be gained by doing so.

          Reply
          1. Exactly and there is no reason Americans will care when the quality Chinese cars start coming ashore. They will sell, just like the Japanese cars did and the Korean cars did.
            I did not realize the Koreans had raided their price so much. Last I looked they had a bunch more content for the price.

            And the reason the Koreans are now so close in price to the competition is their brand equity is now good enough to charge almost as much as their competitors. They are making a bunch more profit now than they used to.

            Reply
  20. GM, just say NO…….. Or it will be my last GM product and I have bought 7 new pickups since 1987, so that does add up.

    Reply
  21. Although its nice to be able to buy domestic it’s a long time since the days of small saloon & large saloon being enough. These days people have differing ideas and desires for the car of their tastes, budgets & lifestyles. Yes in the perfect world we would all be in Astra’s, Focus’es & Golf’s however that’s not the case, I feel it’s only a matter of time before models from all over the world are imported & exported to far away lands to cater for demands of differing tastes.

    Reply
  22. This would be the worst decision GM has made to date. Why would they do this? The media would have a field day bashing the cars, and the profit gain would be dubious. If this guy thinks that this move is smart, then he must be crazy.

    Reply
  23. Let’s raise import taxes on Chinese goods to 25% to “balance” the tables with China…then we can begin discussing fair trade and importing of more goods from them. As for GM even considering this boneheaded move…thanks for completely insulting the very people that bailed you out of bankruptcy. It’s a slap in the face of every American taxpayer (and American worker) that you would take our money, outsource to China, then have the gall to sell it all back to us. Yes, I realize that a true “Made in America” car is getting harder and harder to find. And up to a point in time, I was cheering hard for GM to recover in order to rebound and put more Americans back to work. But things like bringing the Encore over (with nearly 20% Chinese content) and now this…has me looking in other directions for my next vehicle purchase. Sadly, as has been stated above, most Americans won’t give two figs where the car is built, as long as it is cheap. And then they’ll drive by the closed factories and other businesses and wonder why they are shuttered and why their friends and neighbors are out of work.

    Reply
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  31. Of course we are “exporting here,” it’s an American made product! It’s all about finding the least amount of money they have to pay. May I remind you of the bankruptcy the company faced in 2009? Who bailed you out? It may have been the government but we as the people finance it. Take pride in what you have left. You didn’t create GM, the job was given to you. William Durant and Charles Mott are turning in their graves. All I can say, is if they start importing cars from China I won’t be driving GM products any longer.

    Reply

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