Strategic_Management

GM Sales in China Jump 66.9% in 2009 to All-Time High, Continue to Lead the Industry • 1,826,424 units sold in 2009, achieving year-end market share record of 13.4% • Builds on forward-looking strategy of rolling out new products with improved fuel economy • Ongoing expansion and investment position GM for long-term success Shanghai – GM and its joint ventures in China announced today that their domestic sales jumped 66.9 percent in 2009 to a record 1,826,424 units.  Based on bullish sales of Buick, Chevrolet and Wuling vehicles, the GM China family achieved an estimated market share of 13.4 percent, another year-end record and an improvement of 1.3 percentage points from the end of 2008. The strong year-end results were possible in part because of record December sales by GM’s Shanghai GM and SAIC-GM-Wuling joint ventures and the addition of sales from its new FAW-GM joint venture. Modern products “We are proud of our performance in 2009,” said Kevin Wale, President and Managing Director of the GM China Group.  “Chinese consumers responded enthusiastically to our lineup of modern, fuel-efficient and stylish products, validating our strategy of rolling out a steady cadence of great vehicles that are leaders in their respective segments.  This is part of GM’s global strategy of focusing on designing, building and selling the world’s best products.”  In 2009, as part of GM’s aggressive product launch strategy, GM and its joint ventures in China introduced several new and upgraded models to keep up with strong industry demand, including the new Buick LaCROSSE and New Regal turbo series; the Chevrolet Cruze; and the new Cadillac SLS and SRX.  In addition, GM continued to bring to China its latest technology such as the new 1.2-liter engine in the Chevrolet Spark and ECOTEC 1.6-liter DVVT engine in the Chevrolet Cruze.  Both powertrains made the list of the 10 best engines in China for 2009. Growing investment GM and its joint ventures continued increasing their investment in China to help position themselves for long-term success.  To provide better service to local customers, Shanghai OnStar initiated in-vehicle safety, security and communication services.  It welcomed its first subscriber in China on December 20.  In addition, the GM China Science Lab was launched and PATAC opened its new vehicle safety lab. Shanghai GM broke ground on China’s largest proving ground in Anhui province, SAIC-GM-Wuling opened a new engine plant in Qingdao, and GM China moved to new offices in Shanghai, sharing space with the GM International Operations headquarters and the Center for Advanced Research and Science.  To maintain its growth, the GM China family continued to expand.  In the middle of the year, GM launched an important new partnership with FAW, FAW-GM, which has given GM a presence in the light commercial vehicle segment. In December, GM and SAIC Motor announced the establishment of a new 50-50 joint venture investment company, General Motors SAIC Investment Ltd., to capture business opportunities in Asia’s emerging markets. The joint global automobile partners of World Expo 2010 Shanghai, GM and SAIC, built their corporate pavilion.  GM and SAIC will be jointly showcasing their vision for the future of urban transportation called “Drive to 2030.”  GM will highlight its advances and leadership in vehicle electrification and connectivity technology. Record Buick, Chevrolet and Wuling sales Domestic sales by Shanghai GM rose 63.3 percent to 727,620 units in 2009.  The passenger car joint venture was once again led by its original brand, Buick, which experienced sales growth of 59.6 percent year on year to 447,011 units.  The Excelle, which sold 241,109 units, remained the brand’s bestseller for the sixth consecutive year.  Further contributing to the resurgence of Buick in China were the New Regal, which generated sales of 79,930 units, and the new LaCROSSE, which generated sales of 43,429 units in just six months on the market. Chevrolet sales in China likewise experienced strong growth, with 332,774 units sold – an increase of 67.1 percent from 2008.  The Cruze, GM’s new global compact car, enjoyed great success in China, with sales of 92,190 units despite being on the market only nine months.  In addition, the Lova had sales of 118,935 units. In 2009, SAIC-GM-Wuling became the first automaker in China to sell more than 1 million vehicles in a year, increasing its domestic sales by 63.9 percent to 1,061,213 units.  With sales of 596,630 units, the Wuling Sunshine set a Chinese industry record for annual sales by a single model. FAW-GM sold 34,510 light commercial vehicles in the four months after its establishment in August 2009 and began construction of a new assembly plant in Ha’erbin. According to Wale, “As China asserts itself as the world’s largest vehicle market, our domestic operations will be counted on to deliver solid results.  We will continue to introduce cutting-edge products that are leaders in their segments in fuel economy, quality and styling.” Wale expressed optimism about the 2010 outlook. “Despite the sales records in 2009, it looks as if 2010 will be even stronger. The industry outlook is strong and we expect more growth, albeit on a somewhat slower pace. It is our intent to keep up with that growth and make sure we defend our leadership position. GM has all the tools in place to have another great year in China.” General Motors, one of the world's largest automakers, traces its roots back to 1908.  With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries.  GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM is the joint global automobile partner of World Expo 2010 Shanghai along with Shanghai Automotive Industry Corporation Group (SAIC). More information on the new General Motors can be found at www.gm.com. GM in China The General Motors-China relationship dates back more than eight decades. GM China's vision is together with its partners, to be the best automotive group in China. GM has nine joint ventures and two wholly owned foreign enterprises as well as more than 32，000 employees in China. GM, along with its joint ventures, offers the broadest lineup of vehicles and brands among automakers in China. Products are sold under the Buick, Cadillac, Chevrolet, Opel, Saab, Wuling and Jiefang nameplates. In 2008, domestic sales of vehicles by GM and its joint ventures rose 6.1 percent on an annual basis to a record 1,094,561 units. GM ended 2008 with an estimated market share in China of 12.1 percent. It has been the sales leader among global automakers in China for four consecutive years. [pic]Shanghai General Motors Co. Ltd. (Shanghai GM) is a 50-50 joint venture with Shanghai Automotive Industry Corp. Group (SAIC), a leading passenger car manufacturer in China. Shanghai GM was formed in June 1997. It is fully supported by a network of sales, aftersales and parts centers. It builds, imports and sells a comprehensive range of Buick, Cadillac, Chevrolet and Saab products. In 2008, Shanghai GM sold domestically 445,709 vehicles. [pic]Pan Asia Technical Automotive Center (PATAC) is a 50-50 joint venture between GM and SAIC. It provides automotive engineering services including design, development, testing and validation of components and vehicles. Among its achievements is the reengineering of the new Buick LaCROSSE, Cadillac SLS and other products for Shanghai GM. [pic]SAIC-GM-Wuling Automobile Co. Ltd. (SAIC-GM-Wuling) is a joint venture that was launched in 2002. GM China holds a 34.0 percent stake, while SAIC holds 50.1 percent and Wuling Motors holds 15.9 percent. The joint venture is situated in Liuzhou, Guangxi Zhuang Autonomous Region. It has a second manufacturing base in Qingdao, Shandong. SAIC-GM-Wuling manufactures a range of Wuling brand mini-trucks and minivans as well as the Chevrolet Spark mini-car. In 2008, SAIC-GM-Wuling’s domestic sales reached 647,296 units. It ended 2008 number one in sales among Chinese mini-vehicle producers for the third straight year. [pic]Shanghai GM (Shenyang) Norsom Motors Co. Ltd. is a joint venture formerly known as Jinbei General Motors. Shanghai GM holds a 50 percent stake and oversees management. GM China and SAIC each hold 25 percent stakes in the facility, which is located in Shenyang, Liaoning. It manufactures the Buick GL8 and FirstLand executive wagons and the Chevrolet Cruze compact sedan. [pic]Shanghai GM Dong Yue Motors Co. Ltd. is a joint venture manufacturing facility situated in Yantai, Shandong. Shanghai GM holds a 50 percent stake and oversees management. GM China and SAIC each hold 25 percent stakes in the facility, which manufactures Chevrolet brand vehicles. [pic]Shanghai GM Dong Yue Automotive Powertrain Co. Ltd. is a joint venture located in Yantai, Shandong. Shanghai GM owns 50 percent and oversees management. GM China and SAIC each own 25 percent. The facility supplies powertrains to Shanghai GM. [pic]GMAC-SAIC Automotive Finance Co., Ltd. became China’s first approved and operational automotive financing company when it opened for business in August 2004. The joint venture between GMAC LLC, Shanghai Automotive Group Finance Co. Ltd. (SAICFC) and Shanghai GM is providing wholesale service to more than 460 dealers in more than 170 cities across China, and providing retail credit service through more than 810 car dealers in more than 180 cities in China by the end of July, 2009. On August 20, its retail credit business grew more than 20 percent on an annual basis year to date, and the operation has more than CNY 10 Billion of total retail assets. Shanghai OnStar Telematics Co. Ltd. is a Shanghai-based joint venture that will provide a range of in-vehicle safety, security and communication services. Established in 2007, it will begin rolling out its services in late 2009, initially for vehicles manufactured and distributed in China by Shanghai GM. GM subsidiary OnStar and SAIC subsidiary Shanghai Automotive Industry Sales Co. Ltd. (SAISC) each own 40 percent of the joint venture. Shanghai GM owns the remaining 20 percent. FAW-GM Light Duty Commercial Vehicle Co. Ltd. is a 50-50 joint venture between GM China and FAW Group Corp. (FAW), one of China’s leading automakers. It was launched on August 30, 2009 and is based in Changchun, Jilin. It is focused on the production and sale of light-duty trucks and vans. It also will engage in R&D, exports and aftersales support. The joint venture includes FAW Harbin Light Duty Vehicle Company Limited (TBD) which is located in Ha’erbin, Heilongjiang, and FAW’s share in FAW-GM Hongta Yunnan Automobile Manufacturing Company Limited (TBD)　which is situated in Qujing, Yunnan. [pic]GM Warehousing and Trading (Shanghai) Co. Ltd. is located in Shanghai’s Waigaoqiao Free Trade Zone. The wholly owned parts distribution center (PDC) officially started operation in August 1999. It was established to ensure the quick delivery of genuine GM parts to customers in mainland China. The PDC features a fully computerized management and inventory control system and stocks about 25,000 different parts. [pic]GM (China) Investment Corp. is a wholly owned venture based in Shanghai. It houses all of GM’s local staff and is an investor in GM’s vehicle joint ventures in China. [pic]ACDelco, the world’s leading aftermarket brand, operates a growing network of 85 wholesale distributors and 380 ACDelco Service Centers in China. The facilities, which stock genuine ACDelco parts, provide repair and maintenance services for all makes and models of vehicles on China’s roads. General Motors-Shanghai Jiao Tong University Institute of Automotive Research is a cooperative institution established by GM and Shanghai Jiao Tong University. It serves as an umbrella organization for both new and existing joint research and educational programs. A Chinese-owned GM, it could happen As Chinese automakers eye bargains around the world, some think they could make a play for GM once it goes public. [pic][pic][pic]EMAIL  |   PRINT  |   SHARE  |   RSS • TWITTER • Yahoo! Buzz • DIGG • FACEBOOK • DEL.ICIO.US • REDDIT • STUMBLE UPON • MYSPACE • MIXX IT Subscribe to Top Stories [pic][pic][pic][pic][pic] [pic]feed://rss.cnn.com/rss/money_topstories.rss Paste this link into your favorite RSS desktop reader See all CNNMoney.com RSS FEEDS (close) [pic]By Chris Isidore, CNNMoney.com senior writer Last Updated: November 24, 2009: 4:46 AM ET GM 2012: Future cars [pic] General Motors recently showed reporters and select members of the public what it plans to build over the next two years. View photos [pic]NEW YORK (CNNMoney.com) -- GM could one day be Chinese owned. A shocking concept for the ultimate all-American company, but one some auto industry experts say isn't too far-fetched. "I can tell you right now the Chinese are shopping heavily in the U.S. auto sector," said David Cole, chairman of the Center for Automotive Research, a Michigan think tank. Cole said such a deal isn't imminent and wouldn't happen until GM starts selling shares to the public, likely a year or more from now. But he says buying GM would be a major opportunity for the nascent Chinese auto industry. "The Chinese have a lot of our money and they're looking to invest it," he said. The Chinese have already shown an eagerness to buy some of the damaged brands being cut loose by U.S. automakers. GM is in the process of finalizing the sale of its Hummer unit to Sichuan Tengzhong Heavy Industrial Machinery. Ford Motor (F, Fortune 500) is in talks to sell its Swedish car unit Volvo to Chinese automaker Geely. Consolidating power in China The Chinese industry is extremely splintered, with more than 100 automakers, some no more than regional players. But the Chinese government is pushing the industry to consolidate; something experts think will greatly reshape the industry in the next few years. And the new larger players will become even better positioned to make a play for troubled automakers around the globe. Cole isn't saying that GM would be China's top purchase target in the near term. Other experts see it as more likely for the Chinese to buy a second-tier Asian or European manufacturer, or perhaps even Chrysler if its combination with Fiat Group doesn't go as well as planned. But a Chinese-owned GM wouldn't be a shock to Bob Schulz, the top automotive credit analyst at Standard & Poor's, not after all the other changes the company and the industry have seen in recent years. "Assuming there's no government restrictions on something like that, anything is possible," said Schulz. It wouldn't be a cheap purchase, despite all the company's losses in recent years. Rod Lache, auto analyst for Deutsche Bank, recently estimated that based on the company's bond prices, the market is now valuing it at about $42 billion. That price could rise assuming sales improve and the company returns to profitability before it sells shares. Michael Robinet, VP, global vehicle forecasts, CSM Worldwide, wouldn't comment on which global automakers the Chinese might be interested in buying, but he agreed there's a lot of interest within the industry for such purchases beyond the few small damaged brands purchased so far. 0:00 /1:12GM to return bailout money[pic] Such purchases would give the Chinese access to needed technology, as well as auto plants around the globe to serve various markets. He said the dealership and other distribution networks are also very important for China's hopes to eventually become a global player. "It's all about ease of entry into new markets," he said. "It's much easier if they buy an established distribution channel rather than introduce their cars into the U.S. or European market." China: World's biggest market China has moved ahead of the United States this year as the world's largest market for sales of cars and light trucks. Even if there is a rebound in U.S. sales in coming years that puts American car buyers back in the lead, no expert thinks they'll be able to stay ahead of Chinese buyers for very long, especially with so many Chinese still without cars. "The potential for U.S. auto sales is dwarfed by the growth potential of China," said Kim Corth, president of auto consultant IRN. China is arguably already the most important market for GM, in terms of both growth and profits. The company has sold 1.5 million vehicles in China through the first 10 months of the year, up 60% from a year earlier. By some measures GM and its joint ventures have the largest market share in China, and its China sales now trail U.S. sales by only 14%. While GM officials say they expect Chinese sales growth to slow and U.S. sales to rebound in the coming years, it's not tough to see GM selling more vehicles in China than in its home U.S. market, perhaps as soon as the next decade. Already the company sells far more vehicles overseas than it does in North America. More importantly, China is already in the lead for GM in terms of profits. While it does not break off earnings from China specifically, the country was the major driver of the $429 million it made in the Asia-Pacific region in the third quarter, which ran from its emergence from bankruptcy July 10 through Sept. 30. The rest of GM's overseas auto operations lost a combined $192 million in the same period, while its North American losses came to $651 million during that period. All that strength in China could leave GM's U.S. ownership somewhat vulnerable. If GM's major Chinese partner, SIAC, wanted to buy a controlling stake in GM, the company would have a difficult time saying no, given its importance to the company's future. The federal government took a 61% stake in GM in return for the $50 billion in pumped into the company to keep it operating late last year and through its bankruptcy reorganization earlier this year. Officials from both the Obama administration and GM have said the intention is for GM to have an initial public offering as soon as the second half of 2010 in order to let shareholders, including the Treasury Department, sell their shares as soon as possible. But it is also unlikely that even those eager sellers would dump all their shares at once, so it could take some time after the IPO for a majority of GM to be available on the open market. GM spokeswoman Renee Rashid-Merem wouldn't comment directly on the idea of a Chinese-owned GM. "Clearly we've had successful partnerships with the Chinese joint ventures and we're looking to that market for growth," she said. "But relative to an IPO and who might buy into the company, we're not going to comment on any of those particulars." Of course there are plenty of hurdles to a Chinese purchase of a company as large and symbolically important as GM. One would be political. "I think there would be a national outcry in that regard," said IRN's Corth, who points out the backlash when Chinese oil company CNOOC tried to buy Unocal in 2005. GM, despite its troubles, is far more of a U.S. icon than Unocal. But when the China-Unocal deal was blocked, there was a U.S. buyer, Chevron, ready to step in and buy the company. There's not likely any U.S. company that would be interested in buying control of GM. The Treasury Department, the union-controlled trust funds and the former GM bondholders who got stock in company in the bankruptcy process are all on record wanting to sell their stakes in the automaker as soon as possible. Those three groups hold almost all the GM shares. Beyond those political considerations though would be the question of whether any Chinese automaker feels it is ready to take on a challenge the size of GM. "They're a little ways away from a purchase of that size," said Tim Dunne, an expert on the Chinese auto industry at J.D. Power & Associates. "They're still getting their own feet wet in terms of being automakers. They know how tough it is to manage a company the size and complexity of GM." [pic] Chinese Lessons: What GM Has Learned in China By Michelle Krebs, Senior Industry Editor, Edmunds AutoObserver | Published Nov 29, 2006 ส่วนบนของฟอร์ม [pic][pic][pic][pic][pic] • Poor • So-So • Pretty Good • Good • Excellent 2 Ratings 2 Ratings ส่วนล่างของฟอร์ม [pic]SHANGHAI, China — General Motors in China would make a great case study for an MBA student. While GM tries to turn things around in the U.S., its sales are soaring in China, where the automaker surpassed Volkswagen to become No. 1 in passenger car sales. The contrast between GM China and GM North America is stark — and not lost on top GM executives. Indeed, they smartly are making a case study of their own of GM China to see what valuable lessons translate to other markets. Here's an outsider's view of what that case study should consider. A little bit of luck: No question, GM has lucked out. Wise GM executives should recognize some of their good Chinese fortune, indeed, has been luck. Everyone knew China eventually had huge potential; no one knew when it would be realized. Absolutely no one — including GM's analysts — predicted how high vehicle sales would soar in such a short period of time. GM executives in China joke how every single forecast for industry sales and GM's volume and share have been way off the mark. In contrast to its North American forecasts, which have been equally wrong as GM has underperformed in both sales and market share, GM China has enjoyed higher sales and share than predicted. GM China has ridden the crest of the wave. In 1998, China's total vehicles sales were under 2 million units a year. Last year, they were just shy of 6 million vehicles, and 2006 is expected to be just north of 7 million. No one now doubts that China will be the world's largest market for vehicles in the next decade or so. China currently is GM's second largest market behind the U.S. Timing is everything: While lucky, GM, at the same time, deserves credit for its timing. In particular, now retired GM Chairman Jack Smith deserves — and receives from current GM management — credit for moving early and fast in China. Smith chose to take the China risk with no guarantee there would be any wave to ride in short order. Arriving early allowed GM to partner with the best players (see below), grab up sales and market share for a dominant position and earn hefty profits. China has represented a license to print money for early arrivals as profit margins have been hefty due to demand for vehicles far outstripping supply. Those margins now are being squeezed as competition intensifies. Solid partnerships: Latecomers have been forced to partner with also-rans, and they have not enjoyed GM's success. Chinese law requires that a foreign automobile manufacturer operate in China under a joint venture agreement with a local manufacturer. GM gained a solid partner with Shanghai Automotive Industries Corp. (SAIC), China's largest auto manufacturer, which also partners with others, including Volkswagen. GM has had the luck of a crap shoot with many global partners. Failures include the costly Fiat fiasco and largely unfruitful Subaru affiliation. But partnerships related to China have operated well. In part, success appears to be due to the fact that the partnerships have been allowed to flourish and develop a life of their own rather than either partner gaining the upper hand. In addition to SAIC, GM formed a three-way venture with SAIC China's Wuling that has been awesomely beneficial. The venture is No. 1 in the mini truck market with sales soaring by double-digit annual increases; they are now at more than 400,000 vehicles a year. The big seller is the Wuling Sunshine, a boxy, vanlike vehicle that starts at under $5,000 U.S. Further, GM China has capitalized on its non-China ventures, including GMDAT, the new entity formed from the ashes of South Korea's Daewoo. The venture has provided critically needed small cars in China as well as other markets. Fast and furious: With the foundation laid, GM, notoriously slow-moving, has traveled at light speed in China. In 1998, GM had a single assembly facility to build a single model, the Buick Regal. GM sales that year were about 61,000 Regals. Today, GM China sells five brands — Buick, Cadillac, Chevrolet, Opel, Saab and Wuling — more than 30 models with sales forecasted at nearly 864,000 vehicles this year. In China GM has eight vehicle assembly plants, three powertrain facilities, an engineering and design center, an automotive financing arm and some of its supplier operations, like AC Delco and Allison transmission. GM employs more than 20,000 people in China. Part of the success for its lightning speed in China has been support without meddling from corporate headquarters. Further, China's Wild West environment has forced new business methods. Troy Clarke, now president of GM North America who previously headed GM's Asia-Pacific region, said decision-making there is fast and different compared with GM North America. Here, decision-making relies on the meeting calendar. Everyone gets together, they discuss (likely endlessly) and then decisions are made. Clarke noted such meetings are impossible in the far-flung Asia-Pacific region. So they are made in series through phone calls, which result in quicker decisions. Thinking global, acting local: GM has capitalized on its global capabilities, but applied them locally. The Cadillac SLS, introduced at the recent Beijing auto show, addresses the needs of the Chinese market for a roomy, luxurious backseat for chauffeur-driven riders. The SLS is a stretched version of the STS. Same, too, for the Buick LaCrosse. Both were designed and engineered largely in China (the LaCrosse) or with heavy influence from China (the SLS). In the same vein, GM China has been able to take vehicles from other markets and create new niches, addressing a specific need in China. GM China appears to be doing a better job of truly listening to customers and partnering with dealers as well as doing more with less than GM North America has. WARNING: But dangers are arising on GM's Chinese horizon. Indeed, GM executives acknowledge that major challenges confront them: increased competition with virtually every automaker in the world doing business in China; additional vehicle price reductions that further squeeze profit margins; government changing regulations on short notice and seemingly at whim; and managing its own size and complexity of its China operations. In addition, here's what an outsider sees as dangers. It's brilliant that GM is bringing executives from other global operations to China, presumably to learn. What GM China needs to guard against is executives bringing in their cronies who may not be best suited for the job or execs who are not open-minded to learning from the Chinese and smother the Chinese with their way of doing things. Clarke relates the tale of his first visit to GMDAT in Korea. With a background in the metal part of the auto business, Clarke immediately recognized how the Koreans' body-in-white process represented a best practice standard that should be spread throughout GM. He told headquarters, which sent a half-dozen people. They must have been of the notoriously GM "not invented here" variety since Clarke noted: "They apparently forgot everything they'd seen on the flight home, because nothing happened." Clarke was persistent. Six more came and then the top dogs. Finally, the new practice was adopted. Too much of many things could be a downfall for GM China: too much attention, i.e. meddling, dictates, etc. from headquarters; too much production capacity; too many brands; too many dealers. All have been downfalls for GM North America. So the lessons go both ways. GM China needs to learn from the lessons of GM North America and steer clear of them. And, so far, that seems to be the case as GM China appears to be moving carefully and wisely. Indeed, if GM China suffers the same pitfalls as GM North America did, it'll see its Chinese fortune cookie crumble.