Leaner GM better ready for auto battle

It may be experiencing a hard time at home, but General Motors (GM) is still climbing in China - the market that analysts and executives agree holds the greatest potential worldwide.

Although the iconic carmaker filed for bankruptcy protection on June 1 and launched a reconstituted GM on July 10 with only core assets and four brands, the slimmed-down giant might now be even more fit for battle in China.

"There is no major change to our strategy as well as the way we operate here in China," said Kevin Wale, president and managing director of GM China.

"The formation of the new company will only improve our operations in China," he said. "We will maintain our momentum and continue to be aggressive in the marketplace by delivering great products and services to our dealers and customers in the future."

Analysts say GM is profitable in the country, a crucial fact that enables it to fund new programs and projects from revenues generated in China itself.

"We are working hard here to continue to design, engineer, build and sell great products to satisfy our customers. Our new models and continuing product development remain on track," said Wale.

The restructured GM has given up all its other regional operations and closed some of its facilities in Latin America, Europe, North America and the Asia-Pacific region.

GM International Operations (GMIO) in Shanghai now coordinates operations in varied regions of the world outside North America, demonstrating the all-important plans GM has for the Chinese market.

"It (GMIO) is based in Shanghai since China and the US are two crucial markets to our new company, it helps keep a very good balance between our traditional US market and growing Asia markets," said Wale. "It is also a sign of the importance of China and shows our great confidence for long-term development in the country."

GM benefited from China's robust auto sales in the first half this year due in part to its lineup that includes small-engine cars and minivans.

"In the future, we will continue to utilize GM's strong global product development footprint and advanced technological resources," Wale said.

New products

The new GM is in the process of reinventing all of its core brands. Within two years, the company will roll out five new products under its Buick and Chevy brands in China, with the Chevy Cruze and Buick's Regal and LaCrosse the first wave. More than 30 new models will be introduced across the nation in the next five years.

The all-new Cadillac SRX, powered by a 3.0L SIDI engine will be on sale in China later this year.

"In addition to new products, we are also trying to realize growth potential through expansion of dealer networks, especially in fast growing third and fourth-tier cities," the GM China president said.

"We are also committed to strengthening and expanding dealerships in China. All of our existing customers nationwide can depend on their warranties and receive high-quality service with our dealer network."

GM is also introducing its OnStar in-vehicle safety, security and information service to China later this year, the first time it will be available outside North America.

OnStar's "eighth-generation" technology "will definitely trigger more demand for vehicle telematics and help GM take lead in this brand-new area", said Wale.

In the first six months, 4.5 million passenger cars were sold in China, a 25.6 percent increase from a year ago, as the government's tax reduction and subsidies for rural residents spurred small car sales.

Robust growth

GM and its two joint ventures sold 814,442 vehicles in China in the first six months, an increase of 38 percent from the same period of 2008, after its June sales continued robust growth - a surge of more than 61 percent over the same month last year.

"GM applauds the government's stimulus policies and regulations on the auto industry and market to encourage the purchase of small displacement as well as clean energy vehicles as they are in line with GM's initiatives to help meet China's transportation challenges," said Wale.

Six Wuling models made at the SAIC-GM-Wuling Automobile joint venture in the Guangxi Zhuang autonomous region and four Chevrolet products qualified for the tax reduction.

As well, the Buick LaCrosse Eco-Hybrid and Cadillac Escalade 2-Mode Hybrid made at Shanghai GM, its flagship joint venture with SAIC, are now set for rollout in China. The plug-in hybrid Chevrolet Volt is scheduled to arrive in 2011.

GM is also the only multinational to make a 6-speed automatic transmission in China.

About 95 percent of GM passenger cars sold in China have 4-cylinder engines, which have helped improve its average fuel economy by 20 percent over the past five years, double the industry standard.

"We've developed modular and flexible powertrain architecture integrating some truly leading-edge technologies that deliver improvements in fuel efficiency up to 15 percent. And there is much more to come - GM will invest in more than 10 new engines and transmissions over the next five years in China," said Wale.

(China Daily 07/27/2009 page6)