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Why China's Love Of Buicks Is Good News For Americans

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#1 · (Edited by Moderator)
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?__
 
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#3 ·
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)
 
#7 ·
Good find Hurricane. I look forward to the report.

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.
 
#14 ·
....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
 
#15 ·
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.
 
#17 ·
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.
 
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