GM Inside News Forum banner
1 - 18 of 18 Posts

·
Registered
Joined
·
3,557 Posts
Why China's Love Of Buicks Is Good News For Americans
By Phil LeBeaucnbc.com
| 30 Jul 2008 | 08:43 AM ET



With GM on the verge of soon exporting Buick Enclaves to China, I'm reminded of the people who e-mail me on a regular basis about "China sucking the life out of the American automakers." That's a paraphrase, but you get the point. As GM and Ford have expanded in China, they are continually slammed by people who see China as the evil unknown that will take Big 3 jobs.

The pending exportation of Buick Enclaves built in America to be sold in China should convince people of the promise China holds. GM has gone further than any other automaker (and yes, that includes Toyota, Honda, and Ford) to grow and leverage its business in the communist country. It's not a one way relationship. Sure GM has invested billions in building its China business. but it's also made huge profits in that country.

I've seen GM's strength in China first hand. When it was just starting to pick up steam in China back in 2003 and more recently when I spent time with GM CEO Rick Wagoner in Beijing. Wagoner, along with former CEO Jack Smith, gambled in the '90's China would pay off. And it has. But Wagoner knows GM can't slow down, even though it's number one in China.

More here: http://www.cnbc.com/id/25929621/site/14081545?__
 

·
Registered
Joined
·
6,021 Posts
That's gotta be the single best gamble GM made in the 90's. I just don't want our cars to be built there and imported here. We buy enough China goods. I'm glad to see us export the Enclave to them for a change. I hope it's successful!
 

·
Registered
Joined
·
2,371 Posts
I'm rather surprised that the Chinese government allows this in the first place. Generally they require a large percentage of the manufacture to let foreign companies to sell products in the country. I guess they just really like ugly vehicles? (got my heat shield on)
 

·
Registered
Joined
·
4,660 Posts
That's gotta be the single best gamble GM made in the 90's. I just don't want our cars to be built there and imported here. We buy enough China goods. I'm glad to see us export the Enclave to them for a change. I hope it's successful!
I agree, it really panned out for GM. Aren't most Chinese government cars Buicks? I remember other endeavors like the "driver-less car" thinking wtf?
 

·
Premium Member
Joined
·
6,926 Posts
I think the Enclave will sell nicely wherever it goes. So I expect a good amount of sales coming from China. Maybe not as much as the Park Avenue, however.
 

·
Super Moderator
Joined
·
10,889 Posts
Good find Hurricane. I look forward to the report.
I'm rather surprised that the Chinese government allows this in the first place. Generally they require a large percentage of the manufacture to let foreign companies to sell products in the country. I guess they just really like ugly vehicles? (got my heat shield on)
The government DOES allow it, but only at a substantial import tax. There is a lower tariff if you import knock-down-kits though. GM must be importing the Enclave at a substantial loss or pricing it incredibly high. Chances are that if the product sells well, that perhaps they'll start building them in China as well. Maybe this is nothing more than a "test" to sample the waters for local production? Who knows.
 

·
Super Moderator
Joined
·
10,889 Posts
That's gotta be the single best gamble GM made in the 90's.
The other big gamble of the 1990s was the fruition of Saturn (though Saturn's roots harken back to the 1980s when GM's CEO at the time thought to create a company outside of GM's bloated bureaucracy). Saturn was profitable in 1993 and has ebbed and flowed since.

As if the gamble paid off, we are still trying to figure out if the "experiment" was worth it (not flaming Saturn here - great cars, but not making a huge sales impact in the market unfortunately).

The other huge "gamble" since the 1990s has been Daewoo - and I'd say that Daewoo is turning out to be a very profitable and well-thought-out gamble. Kudos to GM on that as well - it has become a centerpiece of GM's expansion in Asia, emerging markets, etc.
 

·
Registered
Joined
·
4,822 Posts
I'm rather surprised that the Chinese government allows this in the first place. Generally they require a large percentage of the manufacture to let foreign companies to sell products in the country. I guess they just really like ugly vehicles? (got my heat shield on)
I believe I read that a foreign company must have a domestic partner to produce vehicles in China. Not to spread mis-information, but I believe this is a concern because it allows the Chinese manufacturers access to very valuable information.
 

·
Registered
Joined
·
397 Posts
I believe I read that a foreign company must have a domestic partner to produce vehicles in China. Not to spread mis-information, but I believe this is a concern because it allows the Chinese manufacturers access to very valuable information.

GM does have a JV with a Chinese company for production. However, this is actually exporting the Enclave from the US where it is manufactured to China. No production (or at least none has been mentioned) is taking place in China for the Enclave. It will be sold under that JV though through the normal Chinese Buick distribution network.
 

·
Registered
Joined
·
2,750 Posts
I believe I read that a foreign company must have a domestic partner to produce vehicles in China. Not to spread mis-information, but I believe this is a concern because it allows the Chinese manufacturers access to very valuable information.

This was my understanding as well and I think it has to stop. I don't understand why the WTO can't tell Chaina that it must give the same access to its markets that it has in other countries especially the United States. The Chinese have invented nothing. They either buy it outright or they steal it. GM Ford VW Toyota and all the rest should be able to export cars to China with tarrifs no larger than the exporting country has itself and these manufacturers should also be able to produce cars in China without being required to have a Chinese partner stealing your technology.
 
Joined
·
5,934 Posts
I just don't want our cars to be built there and imported here.
I can see the Riv and Park being imported. It could help GM's perception here. Unless there is a backlash against it being Made in China.

Accrording to the Ted Koppel Discovery series, "China: The Peoples Republic of Capitalsim" they cited a few instances of US firms shifting some production to China helped them to keep some manufacturing here in the States. They were able to save money, and keep the US plants open.

If GM imports the Riv and Park to the States and GM's perception goes up and they make more money here in the States then they could shift production back here. That's what I think, at least.
 

·
Registered
Joined
·
1,988 Posts
thanks for sharing this article Hurricane :)

I hope then GM continue its expansion to Asia and to go for the next big Asiatic market as well: India!
....a country that recently gave the world the Tata Nano? I'm gonna take a wild guess that India isn't ready for Buick yet......lol
 

·
Super Moderator
Joined
·
20,962 Posts
But Wagoner knows GM can't slow down, even though it's number one in China.
Best thing I've heard all day. Shows that GM's learned from the 80s and 90s, just because you're number one doesn't mean that you can take a day off. Do that and toyota will bite you in the ass all over again.
 

·
Registered
Joined
·
138 Posts
I guess they just really like ugly vehicles? (got my heat shield on)
Buicks, ugly?...hardly. The last truly "ugly" American Buick had to be the last generation Skylark of the early-mid '90s. I'll give you the fact that our Buicks haven't overwhelmed the American auto buying public, but Ford, Toyota, Nissan and Honda have certainly churned out many many more UGLY models than Buick in recent years. Honda Element? Honda Ridgeline? 2009 Toyota Venza (shudder)? 2009 Nissan Maxima (gag)? I mean come on, even China's Buick Excelle is better looking.

I believe Buick's current and upcoming domestic as well as foreign designs (Enclave, LaCrosse/Invicta, Park Avenue) far surpass any of the models I mentioned before in beauty and elegance. At the rate they are going, Buick is building an exciting portfolio of quality products and shattering their "fuddy-duddy" image to become a company as well revered as Lexus, Infiniti and Cadillac. I say bravo if the Chinese can see the potential in Buick, even if some of us here in the states refuse to give Buick the credit it deserves.

**Stepping down off soapbox**
 

·
Registered
Joined
·
10,450 Posts
Most countries have a system where joint ventures or offset of production is required for large deals. When Australia bought Boeing 727s long ago they insisted that Boeing had to subcontract work to the three Australian aircraft factories. As the world churned and time passed Boeing now own those three factories, though they are vastly reduced in size they still manufacture composite structures.
So dont be sure that JVs wont end up being something you are glad happened. The future of China is anyones guess.
 

·
Registered
Joined
·
4,864 Posts
I agree, it really panned out for GM. Aren't most Chinese government cars Buicks? I remember other endeavors like the "driver-less car" thinking wtf?
I know for a long time most Chinese govt-mobiles were last generation VW Passats, known there as Santanas.
 
1 - 18 of 18 Posts
Top