GM CEO Mary Barra recently outlined the automaker’s plans for the Chinese market, indicating that The General might shift its focus to the high-end segment with the potential for profit growth.
The recent insight was provided during a recent Q-and-A session at the Wolfe Research Global Auto and Auto Tech Conference. During the session, Barra addressed a variety of different issues, including GM’s approach to the Chinese market. General Motors’ Chinese sales have been in decline since 2017.
Mary Barra in 2021
“I think though, when you look at the Chinese market, it’s very different than it was five years ago,” Barra said during the Q-and-A session. Barra indicated that the number of domestic Chinese companies producing electric vehicles is on the rise, making for greater competition, while adding that the number of domestic brand producing EVs indicates a future adjustment period as “there’s only a handful of companies that are profitable from a domestic perspective.”
Despite a rise in competition, Barra stated that there are opportunities for General Motors, saying that “where we play in the strengths of our brands, I think it’s more on, I’ll say the premium or luxury side.”
Barra also pointed to General Motors’ investment in SGMW (SAIC-GM-Wuling), saying that the joint venture “compete[s] very, very well at the very price sensitive parts of the segments,” but adding that General Motors would play a different role in the Chinese market.
“But when you look at the strength and growth potential in China, I think it’s a market that we want to play in appropriately,” Barra said. “And I do think it’s more at the premium and the high end.”
This higher-end portfolio will include the Chevy, Buick, and Cadillac brands, whereas SGMW will cover the lower-end of the market with the Baojun and Wuling brands. It’s also worth mentioning the Durant Guild imported vehicle platform, which should be profitable, given the sale of one vehicle in this division is roughly equivalent to five mainstream models sold in China, the latter of which are high in volume, but low in margin.
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Comments
China’s population is going to collapse at the worst natural rate in known human history. Their economy will do the same. Good luck with this.
Yeah, their population is on track to dip below americas by 2060.
Also, did I see Chevy is now a premium brand 🤨??? How bad are Wulings?!?!
I used to travel quite a bit to China and Buick was the car the Chinese liked….Mary Barra needs to retire and get a Mechanical Engineer instead of an Elecrical Engineer at the helm.
Not good. it is a clear when gm failed quality control of luxurious local brand baojun, lots of Chinese are decided do not buying GM cars.
Baojun is far from luxurious. The Baojun 530 sells as an entry-level Chevrolet Captiva and at the highest end as the MG Hector in India which is only slightly premium (but less so than Buick).
I just want her to be replaced. With someone passionate about cars and not China and trying to pretend they’re in the high end market. When GM plays in the high end market, the only person that gets the notice is marketing.
If GMC was a thing over there, it may make it better in terms of profits.
If what we are herring in this article that the traverse is now a “premium” vehicle, there’s no way anyone over there can afford a GMC
Chevy is premium now ? lol higher priced imported malibus incoming
Mary continues to drop the ball for America. Maybe she should go live in China.
Barra knows China sucks all the profit out of anything made in that country. The only thing gm makes a dime on is ACDelco parts. The day is coming when China says we’ve sucked everything we can out of you, we don’t need you anymore.
I recall that during earnings reviews China profits would get reported as “equity income” whatever the hell that is.
The average industry price of cars in China is $10,000-$15,000. The average vehicle price in the USA is $49,000. The average EV costs $35,000 in China compared to $50-$70,000 in the US. Chevy is considered luxury not because of its quality but because of its price tag. The only way GM can sell $30,000 Chevys in a market that is used to buying $10K cars is to call them luxury. It’s all marketing.
There are TONS of vehicles in the US that can be bought for less than $49K.
Yes, and there are tons of vehicles that can be purchased for under 10K in China. I’m simply saying what’s considered affordable in the West must be sold as luxury over in China. The price gap is that big.
Why does it feel like the US is a distant 26th on Mary’s marketing list?
Every 3rd article on GMA is about GM paying more attention to everyone else but the US.
China is a closed society under Communist Socialism rule.
And gm wants to enter the premium, luxury automobile market.
So, what could go wrong?
Mary sure does favor communist China She should go live there .She has failed the American car buyers..
Mary says…”drink my Kool Aide and listen to my voice. All is perfect.”
“…shift its focus to the high-end segment with the potential for profit growth.”
That should read “with the potential for turning a profit”. As it stands now, they’re losing money in China per their 2023 earnings report. And it’s only going to get worse since they’re on track to lose another 300,000 sales there in 2024.
Focusing on margin enhancement and cost cutting while ceding volume and market presence nearly everywhere has certainly been a halmark of this management team.