mobile-menu-icon
GM Authority

General Motors Outlines Future Strategy For China, Includes More Product, More Manufacturing, Dealerships & People

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.

Product

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.

Manufacturing Plants

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.

Dealerships

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.

People

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.”

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

Subscribe to GM Authority

For around-the-clock GM news coverage

We'll send you one email per day with the latest GM news. It's totally free.

Comments

  1. There’s only one way to play the game in China and GM is doing it the only way they can.

    GM keeps proving they are a juggernaut there and seems to be firing on all cylinders. Unfortunately Ford is way behind and needs to catch up.

    Reply
  2. Surly GM is in the perfect position worldwide to conquer all markets thus catering for all tastes & there be no reason to have a full range from Kei cars, small, medium, large, XL, executive, muscle, MPVs, SUVs, coupes & trucks both domestic & imported under all brands.

    Reply
  3. “On the SUV front”, the Opel Antara is missing in the list.

    OK, it is not produced locally, like all the Opel offering, it is instead imported from Korea.

    Reply
    1. @Observer7 the Antara’s arrival in China is news from a couple of years ago, which is why it’s not on the list for new model arrivals for 2013 – 2015.

      Reply
      1. I was referring to this: “On the SUV front, The General CURRENTLY offers five SUVs in China:” (my emphasis) and in this list of the currently offered SUVs the Antara is missing.

        I could not refer to the “plans to introduce another nine new or refreshed SUVs in China within the next five years”, since none of them were named.

        Reply
        1. You’re absolutely correct. Antara added to the list of current CUVs being sold in China. Thanks for the heads up.

          Reply
  4. Mokka should be produced in Europe.

    Reply
  5. ” 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”
    I agree with you on that but the only way gm can sell cars in China is through JVs. I hope the situation changes soon.

    Reply
    1. That is absolutely true. However, there are different ways to approach the forced joint venture situation. One is to do what GM seems to be doing: dive in head first and open up R&D centers in China, allowing the shared ventures design and engineer vehicles — a practice that allows the country to learn quickly and easily the ways of bringing a world-class vehicle to market.

      The other is to keep their R&D closer to the vest.

      Both approaches should still result in a successful sales volume in China, but one protects GM’s best interests and years of R&D investments.

      Reply
    2. “the only way gm can sell cars in China is through JVs” — this is not correct.

      A foreign automaker cannot PRODUCE in China without a Joint Venture with a Chinese company. SELLING imported vehicles on the other hand is no problem, though carries additional costs – of transportation, of tarrifs, of I don’t know what.

      You may have noted that GM is selling Opel branded cars only as imports, and thus has it all in its own hand, and also most Cadillacs; in the latter case they want to substitute imports by local production, every year one more car.

      Reply
      1. @Observer7 “SELLING imported vehicles on the other hand is no problem, though carries additional costs – of transportation, of tarrifs, of I don’t know what.”

        It’s the tariffs. The criteria varies, but imported Cadillacs incur a 15 – 35 percent fee based on their “regular market price” (before the tax), pricing most of the vehicles above the direct locally-made competition from Audi, BMW, and Mercedes-Benz.

        Reply

Leave a comment

Cancel