GM eyes more China buys amid consolidation

[NINETY_EIGHT_REGENCY]

GM eyes more China buys amid consolidation

Reuters / April 20, 2007 - 9:45 am



SHANGHAI (Reuters) -- General Motors CEO Rick Wagoner said today that further consolidation was inevitable in China's fragmented autos market, and GM would be active in any shake-up.

Wagoner said that GM was interested in maybe buying smaller local operations in China as a tool to expanding in the world's fastest-growing car market.

"We've been playing in the consolidation business (in China) and it worked great for SGM, and we'd be interested in more," Wagoner said, referring to a tie-up with Shanghai Automotive Co. Ltd. (SAIC).

"I think over time there's going to be more prospects because clearly there are a lot of manufacturers here that are small volume," Wagoner said. It's inevitable there will be consolidation and we want to be part of that," he said, adding that nothing imminent was in the pipeline.

GM has forecast its 2007 China sales will grow by over a fifth from 876,747 vehicles last year, as it rolls out new models to attract increasingly affluent buyers in the world's fourth-largest economy.

The Detroit-based group launched the higher-end Buick Park Avenue models earlier this month, targeting China's business elite. Shanghai GM expects to sell around 6,000 of the Park Avenue line this year. The model is priced at up to $64,550 (498,800 yuan).

Shanghai GM sales rose 26.5 percent in January-March.

GM plans to launch about 10 new or upgraded models this year. GM is investing around $1 billion a year in China, its biggest market outside the United States.

[GM-10]

GM is starting to act like GM again...this is how they began their march to the top a hundred years ago! A little history repeating itself.

[kenman923]

Now they are making a good move.

[Smaart Aas Saabr]

So Yuan or Renminbi? How does that work?

[Slowrider5]

Interesting. There was a WSJ article yesterday or today that talked about how GM is facing some growth challenges due to competition from their partner Shanghai Automotive. Shanghai Automotive is rolling out their own models now, using technology and know-how gained from partnerships with GM & VW, and GM's growth in China has slowed a bit. GM may be doing this as a way to continue growing their market share by acquisition because they're starting to hit a wall with their current venture.

[chinamonty]

Originally Posted by Smaart Aas Saabr

So Yuan or Renminbi? How does that work?

Renminbi (often written as RMB. The offical abbreviation is CNY) means "people's money" and covers the currency in general.
Yuan is the witten form for the Chinese "dollar" Jiao is ten cents.
In talking a Yuan is called colloqially a Kuai and a Jiao a Mao. The term for a cent is a Fen but is rarely used these days.
So USD 100 =CNY772 (forgetting cents)
AUD100=CNY644

[chinamonty]

An article for Mr Wagoners attention and for all of you to read. i guess it is not a surpisise

http://paper.sznews.com/szdaily/20070420/ca2644350.htm

[Realist]

Originally Posted by chinamonty

An article for Mr Wagoners attention and for all of you to read. i guess it is not a surpisise

http://paper.sznews.com/szdaily/20070420/ca2644350.htm

An important article, and I hope GM is aware of the things mentioned there.

I fear that GM is (once again) putting all of it's eggs into one basket (investing and focusing too much on China) and if Chinese cars become dominant in China, GM stands to lose a great deal.

[Bravada]

This is exactly why GM is pondering giving up on their long-standing loyalty to SAIC and look for more partners (like VW does, balancing their partnerships between SAIC and FAW to keep them both at bay and competing for better models from VW). Do also remember that, apart from "GM cars in China", GM also makes "Chinese cars in China", such as the Wulings. I think this is the way to go - beat Chery on the domestic and "developing" markets with own cheapo cars.

That said:

Shanghai-based SAIC Motor has sold 6,300 Roewe 750 sedans

I guess this means there is still time to act

[lam]

Originally Posted by Bravada

This is exactly why GM is pondering giving up on their long-standing loyalty to SAIC and look for more partners (like VW does, balancing their partnerships between SAIC and FAW to keep them both at bay and competing for better models from VW). Do also remember that, apart from "GM cars in China", GM also makes "Chinese cars in China", such as the Wulings. I think this is the way to go - beat Chery on the domestic and "developing" markets with own cheapo cars.

That said:



I guess this means there is still time to act

GM is thinking more of buying out SAIC .

[SUPERBADD75]

and the goofy thing is that SAIC, in trying to do their own thing, is selling a Rover based car. it'd be kind of nice for the Chinese to actually engineer something competitive themselves instead of cribbing from others. that's the most dangerous thing about GM doing anything in China, you know that they're being watched and technology will be stolen.

[Greg Burr]

Seems like GM history is repeating itself: buying different car companies to offer a car for any size (of car or purse)

[chinamonty]

Originally Posted by SUPERBADD75

and the goofy thing is that SAIC, in trying to do their own thing, is selling a Rover based car. it'd be kind of nice for the Chinese to actually engineer something competitive themselves instead of cribbing from others. that's the most dangerous thing about GM doing anything in China, you know that they're being watched and technology will be stolen.

The Chinese will start engineering motor vehicles more and more but it just makes economic sense to buy an existing product froma "fire sale" to help your learning curve and get some revenue to fund development. remember China builds bullet trains of their own design and has just put 150 pairs of them in to service last Wednesday and a further 250 pairs will follow this year.


The technology probably less likely to be stolen than you would imagine. Although IP protection still has quite a way to go it is a newsworthy item here now so the average person is getting to know about it more. They regularly show the destruction of books and DVDs as these graphic -they have large shredders and they use "steamrollers" and shredders for the DVDs -it looks great.
The thing that gets me is that China is 6th on the list of "counterfeiting" nations but cops the most flack. Why hasn't Mexico been taken to the WTO.

[AZian]

Now, why the heck doesnt GM seem to be doing this well on the home-front? Eventually with GM making a trek toward the top of the automotive hill in China, its fall seems to already be lining-up. Let's hope they at least learn from their mistakes (past and current) in north america that still appear to be plaguing them: it's the product stupid!!

[Bravada]

Originally Posted by lam

GM is thinking more of buying out SAIC .

I don't think GM would have the money in their current situation, but this is almost impossible, due to both SAIC's partnerships with other automakers, and the Chinese law, AFAIK, but at the end of the day what is most important is the PRC's government intent on making SAIC an independent automobile manufacturer in their own right (even if their attempts at that are, as of now, kinda underwhelming...)