Plenty of coverage of General Motors and its China operations focuses on the success of Buick and Cadillac. But, GM and its local Chinese partners, SAIC and Wuling, perhaps created the most important division for the automakers in years: Baojun.
Though we cover Baojun’s dealings in China often, but it’s difficult to underscore how integral the brand has become to GM’s operations. Bloomberg reported on Thursday that the Baojun brand serves as Chevrolet did to the United States following World War II; customers purchase a Baojun, and then hopefully file through GM’s more premium brands through a lifetime.
GM and company did their homework before establishing the Baojun brand with Wuling and SAIC in 2010. Auto sales in China’s elite cities cater almost exclusively to the wealthy, but Baojun serves China’s growing middle class and developing markets for inland China.
And the cars aren’t entirely stripped down, either. Matt Tsien, president of GM China, told the outlet that the cars still feature power windows, air conditioning and other standard niceties. They do not, however, boast intelligent safety features or other more luxurious creature comforts. Most cars feature a manual transmission, too.
Lower wages at Baojun plants help keep vehicle prices down as well. The report cited the fact a Chinese auto worker makes around $10 per hour in a major city, while it’s $5 or $7 per hour at an inner-city plant.
The low-cost manufacturing will only help GM grow its bottom line in the near future as Baojun begins to expand into vehicles prices around the $20,000 range. The brand’s cars sell for as little as $6,000 currently.
GM said it sees a plateau for the Buick and Chevrolet brands in the near future in the China, which puts Baojun in the spotlight as a driver of sales volume, especially as GM focuses solely on a few select markets, rather than covering the globe.