GM's Chinese Partner Plans To Compete With GM

[Perian]

Link: http://money.cnn.com/2006/04/05/news...ce=yahoo_quote


After years of partnering with automakers, company says it will produce, export its own car, paper reports.
April 5, 2006: 11:28 AM EDT


NEW YORK (CNNMoney.com) - After years spent working with General Motors and Volkswagen, the Chinese automaker Shanghai Automotive Industry Group is now planning to go at it alone, according to a report published Wednesday.

The government-owned automaker said the move will ultimately result in the production of its own luxury sedan, which it plans to start building within the next six months, the Wall Street Journal reported.

"This is a watershed in the development of the auto industry in China," Michael Dunne, president of Automotive Resources Asia told the paper. "The Chinese formed joint ventures for one purpose: to learn how to do it themselves one day. That day is here."

During their partnership, Shanghai helped produce thousands of Buicks, Chevys as well as Volkswagen Passats, the Journal reported, at the same time gaining technical knowledge and experience from the two automakers.

A spokeswoman for the Chinese company told the paper that the move will help develop a "healthy" rivalry with GM and Volkswagen.

The news may be viewed as adding to GM's woes, which is struggling against a host of problems including an eroding market share, a $10.6 billion loss last year, a restatement of results and a potential strike at the bankrupt auto parts supplier Delphi.

In a prepared statement, GM said it "understands" Shanghai Automotive's "desire for further growth," according to the paper.

Shanghai, which is planning on releasing more details next week about its new car plans, is also hiring engineers and managers from the joint ventures, the Journal said.

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Source: Reuters News Agency

London - Give a man a fish, he eats for a day. Teach a man how to fish, he eats for a lifetime. The Chinese proverb extols the merits of education over handouts--so why is there a mushrooming trend among that country's automakers to draft in more and more managers from foreign companies?

Wang Dazong, the newly appointed vice president of Shanghai Automotive Industry Corporation is not entirely an outsider. The former chief engineer and design manager at General Motors was born in China, but educated in the U.S. Government-owned SAIC--which makes passenger cars, tractors, motorcycles, trucks, buses, and automotive parts--said in a statement that Wang will be in charge of technical management and product development at the automaker, including establishing R&D capabilities for launching its own brand vehicles.

SAIC Motor said in February that it has set up a company--SAIC Motor Manufacturing--to develop and sell a passenger car under its own marque with an investment of $459 million dollars. The first model, based on the Rover 75, is set to be released in the second half of the year.

[Perian]

Dear Shanghai Automotive Industry Group,

You're Welcome.

[2648562]

Surprise, surprise. NOT. Of course this was going to happen. GM and Toyota are going to leave China with their tails between their legs.

[Whirling_Dervish]

The Chinese do this in every industry.

[sigma]

Uh hu... and they are going to start engineering these cars where? If I recall correctly, most of the engineering was done in the US and Korea on the GM China cars.

[mikesright]

Somehow I knew this would happen, with China's policy of making the automakers pair up with the locals insured this would happen. If they can at least come up with their own designs, I wouldn't be so mad at them, like I am with Chevy and their Spark! Oh wait, that's the Chery QQ, my bad!

[SUPERBADD75]

Originally Posted by Whirling_Dervish

The Chinese do this in every industry.

yes they do, but their copies of other people's products are usually cheaper and of inferior quality. this is incredibly sad for GM, but these cars will probably not be as good as GM's vehicles are so i don't really think this is a major threat. at least not immediately. GM does have certain advantages over Shanghai right now and one of them is that they didn't just learn how to engineer and build cars, they've been doing that for 100 years. it will take Shanghai many more years to perfect what they've learned.

[Whirling_Dervish]

Originally Posted by mikesright

Somehow I knew this would happen, with China's policy of making the automakers pair up with the locals insured this would happen. If they can at least come up with their own designs, I wouldn't be so mad at them, like I am with Chevy and their Spark! Oh wait, that's the Chery QQ, my bad!

You should see what they with their cellular partners....

[CobaltSScrazy]

wow...suprise suprise, so is China just going to rip off every industry they come to play in. This is why the joint ventures are rediculous, but at least buick has a luxury image there. As long as the product is topnotch and priced competitively, GM will be fine, although this does make me a little uneasy.

[CobaltSScrazy]

Originally Posted by Whirling_Dervish

You should see what they with their cellular partners....

what?

and what happens to GM now, do they need to "joint venture" it with another chinese company or can they finally sell cars on their own now?

[5 watt]

The article never says if Shanghai Automotive Industry Group will stop making cars for GM in the Chinese market. I have little concern about the Chinese making what amounts to a copy of a copy. Is GM working on making a plant that is has controlling interest in? I believe that is key to GM’s long term success in China.

[cfch3399]

Welcome to the beginning of the end of GM China.

[Whirling_Dervish]

Originally Posted by CobaltSScrazy

what?

and what happens to GM now, do they need to "joint venture" it with another chinese company or can they finally sell cars on their own now?

Quick retelling....

Motorola wanted into China. They had to partner and provide examples of their technology to the government and partner company. They had to do this multiple times over a period of time. Eventually China said "no thank you". Not long after, that partner company annouced they had invented a new CDMA technology, which looked very much like Motorola's.....

This was just prior to my being sent to China for Motorola. The trip didn't happen.

I don't trust China. I never will.

[SUPERBADD75]

Originally Posted by Whirling_Dervish

Quick retelling....

Motorola wanted into China. They had to partner and provide examples of their technology to the government and partner company. They had to do this multiple times over a period of time. Eventually China said "no thank you". Not long after, that partner company annouced they had invented a new CDMA technology, which looked very much like Motorola's.....

This was just prior to my being sent to China for Motorola. The trip didn't happen.

I don't trust China. I never will.

fine example of how they work. why the hell do we trade with them again?

[VibenPontiac]

I'm supportive of global trade but this is a little too much. It doesn't exactly surprise me, as the Chinese do this in just about any industry, but this better be followed up with news of China allowing GM to own and operate their own facilty 100% in China, which of course is a dream that is a long way off.

The partnership better stay in place in one form or another, which I think it will. What are the chances the new Luxury sedan has all the features and styling cues of a Chinese Buick?

The stories you hear about the Chinese foreman who partners with a US company during the day and knocks out copies in his own plant at night are too numerous to ignore any longer. Its time for the U.S. government to take the Chinese to task on these "partnerships" that inevitably lead to the U.S. company getting screwed.

Maybe there's a reason the Japanese HATE the Chinese so much...and we're just behind the 8-ball a little