The Chinese car industry has slowed down somewhat but, as most of you know, is still thriving. Much of its manufacturing capability has been traditionally grown by foreign carmakers who planted the seeds years ago. For instance, GM in 1997
established two joint ventures with the Shanghai Automotive Industry Corporation in China. One was for manufacturing. The other venture, for design and engineering, is the Pan Asia Technical Automotive Center. The center has done the engineering to adapt various G.M. global models for the Chinese market.
This from The New York Times, recently reporting how the design of a new version of the Buick Riviera is being led by a team in China, as was done with the LaCrosse (above), the car responsible for much of GM’s sales success in that country.
My correspondent in Xi’an, Yue Han, remarked that the popularity of Buick has remained very steady over the years and is increasing in this decade. In Xi’an (home of the terracotta warriors and the giant wild goose pagoda), the LaCrosse is considered a highly desirable upscale car, as evidenced by the numbers seen on local roads. The car has become a status symbol because of its comfort, styling, and electronic amenities. Says Yue, “It is really an upper-middle-class car. But the Big People still drive Mercedes and BMWs.” That’s no different from what Buick’s market has almost always been in the U.S.
Shanghai Automotive Industry Corporation (SAIC) partnered not only with GM but also with Volkswagen in a joint venture in 1984. They created Shanghai Volkswagen, one of China’s largest car factories, producing 500,000 vehicles a year. The plant makes everything from Polos (right) and Santanas (below) to Škodas (the Czech marque owned by VW since 1991). Amidst a plunging third-quarter profit, VW was pleased to announce that it was still in the black, thanks basically to its China sales.
VW Chairman Martin Winterkorn noted that while the business climate is still “tough,” China remained the company’s largest market, accounting for one in five vehicles sold. Similarly, Buick sells far more cars in China than in the U.S. Said the Times,
For the first nine months of 2009, for instance, Buick sold 312,798 vehicles in China; in the United States, it sold 72,389.
What are the implications of China’s coming dominance in automobiles? What are its implications for GM’s future? Leave us your thoughts in a comment, please.