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GM dusts off a familiar brand strategy for China boom
Mon Apr 21, 2008
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By Kevin Krolicki
BEIJING (Reuters) - How do you say, "A car for every purse and purpose" in Chinese?
The boom in China's car market has given General Motors Corp a chance to revive the marketing mantra invoked by the company's long-time chief Alfred Sloan -- and to avoid the costly missteps that marked GM's decline in its home market over the past two and a half decades, executives say.
"Certainly, the lessons of the past, we don't forget them when we come here," GM Chief Executive Rick Wagoner said at the Beijing Auto Show this week.
Sloan, who retired in the mid-1950s, is credited for driving GM toward a dominant position in the U.S. market with a brand strategy that started first-time buyers with affordable Chevrolets and dangled Cadillacs as a badge of success at the high-end.
GM's U.S. market share peaked at 45 percent in 1980, before a long-running downturn spurred by quality problems, relentless competition from Japanese rivals such as Toyota Motor Corp and product miscues that made a Chevy almost indistinguishable from a Buick.
But now GM's rise in China under a decade-old joint venture with SAIC Motor Corp has given it a nearly 10-percent share of a market it expects to become the world's largest by 2020. The China market also gives it a rare chance to try to repeat the business past with a happier ending for investors.
After a slow first quarter, GM is only targeting growth only in line with the Chinese market in 2008, which it expects to be up 16 percent. That amounts to an admission that it could lose share since fast-growing Chinese car makers expect to outperform the industry-wide boom and GM's larger rival Volkswagen AG is on a roll.
But while some analysts expect Toyota to claim the industry's top spot in China by the middle of the next decade, GM executives believe they have a strategy to keep the Japanese car company from dominating in China as it already does in other Asian markets such as Japan, Australia and Thailand.
FULL Article: http://www.reuters.com/article/reutersEdge/idUSPEK22539120080421
![]()
Mon Apr 21, 2008
By Kevin Krolicki
BEIJING (Reuters) - How do you say, "A car for every purse and purpose" in Chinese?
The boom in China's car market has given General Motors Corp a chance to revive the marketing mantra invoked by the company's long-time chief Alfred Sloan -- and to avoid the costly missteps that marked GM's decline in its home market over the past two and a half decades, executives say.
"Certainly, the lessons of the past, we don't forget them when we come here," GM Chief Executive Rick Wagoner said at the Beijing Auto Show this week.
Sloan, who retired in the mid-1950s, is credited for driving GM toward a dominant position in the U.S. market with a brand strategy that started first-time buyers with affordable Chevrolets and dangled Cadillacs as a badge of success at the high-end.
GM's U.S. market share peaked at 45 percent in 1980, before a long-running downturn spurred by quality problems, relentless competition from Japanese rivals such as Toyota Motor Corp and product miscues that made a Chevy almost indistinguishable from a Buick.
But now GM's rise in China under a decade-old joint venture with SAIC Motor Corp has given it a nearly 10-percent share of a market it expects to become the world's largest by 2020. The China market also gives it a rare chance to try to repeat the business past with a happier ending for investors.
After a slow first quarter, GM is only targeting growth only in line with the Chinese market in 2008, which it expects to be up 16 percent. That amounts to an admission that it could lose share since fast-growing Chinese car makers expect to outperform the industry-wide boom and GM's larger rival Volkswagen AG is on a roll.
But while some analysts expect Toyota to claim the industry's top spot in China by the middle of the next decade, GM executives believe they have a strategy to keep the Japanese car company from dominating in China as it already does in other Asian markets such as Japan, Australia and Thailand.
FULL Article: http://www.reuters.com/article/reutersEdge/idUSPEK22539120080421
