China could save a tarnished GM brand

The industry publication calculates that Buick sold 206,582 vehicles in the United States in the first 10 months of this year, down 15.4 percent from the same period of 2005. During the same period, Buick sold 218,603 vehicles in China, an increase of 27.4 percent.

Why the Chinese interest in Buick? While it has seen its status fade here in the United States, the longstanding American brand has never lost its reputation in China. And GM has managed to build on that status, selling vehicles under four major brands — Buick, Chevrolet, Cadillac and Saab — through Shanghai General Motors, a joint venture between GM and Shanghai Automotive Industry.

The Sino-U.S. joint venture sells Buicks such as the LaCrosse, the Excelle and the GL8 to Chinese consumers, and it has overtaken German rival Volkswagen AG to become the top automaker in China in 2006, where it has 13 percent of the market. China is now GM’s biggest market after the United States.

The growth comes as GM focuses intently on the growing Chinese market, investing $3 billion over four years ending in 2007, building a network of dealerships and factories.

The thinking is that as GM works to revive its flagging business, which posted a worldwide loss of $10.6 billion for 2005, the booming Chinese economy is a significant new source of revenue that can provide the company with the sort of strong growth that isn’t found in the United States or other Western markets.

Automotive analysts have long said that big U.S. automakers like GM have too many brands to support. Two years ago, GM Vice Chairman Bob Lutz unforgettably described Buick and its sister brand Pontiac as “damaged,” triggering speculation that they would soon be killed off.

Yet both Buick and Pontiac have endured, even though their U.S. sales have lagged in recent years as Japanese and Korean automakers have chalked up significant market share gains. In the face of such fierce competition, many have questioned whether these brands — and others like GM’s Saturn brand and Ford’s Mercury nameplate — can survive in the long term.

GM is working to reverse the staid, old-fashioned aura that surrounds its Buick, Pontiac and GMC brands in the United States through an aggressive restructuring campaign, consolidating dealer networks and focusing on fewer models, making Pontiac its sporty car line, GMC a truck product and Buick a more upscale brand.

The Enclave, which will hit dealerships in late spring or early summer, follows the new GMC Acadia crossover, which is now on sale. Both are based on a unibody platform, offering a smoother ride and better fuel economy than the body-on-frame construction of older SUVs.

Sorry, but...........

OK, let's look at a few facts here..............first, let's keep in mind that ALL foreign car companies (american, german, japanese, etc...) are PARTNERSHIPS with a chinese company - and under chinese law the foreign company CANNOT have a majority ownership in the company. Second, not ALL american "companies" (i.e. brands) are here. The "big three" are here (GM, Ford and Chrysler) but NOT all of their subsidaries. In other words, Ford does not sell Lincoln or Mercury in China, GM does not sell Pontiac and Chrysler does not sell Dodge.

The other thing to remember............MOST of the amreican cars that are sold in China are BUILT in China. GM, Ford and Chrysler are investing billions of dollars to build assembly factories and facilities in China, and therefore providing chinese jobs as a result. This is A LOT different than a chinese car company exporting a car in importing it into the USA.....american labor (other than sales and service workers at the showrooms) is not involved. If american companies had to export their products into China (and pay the relavant import taxes), a Ford in China would be more expensive than a BMW in the USA!!

I fully support the chinese car companies desire to export their products to the rest of the world (with the USA being a prime location), but the doors of trade MUST open both ways and be equal for all. I know that the cost of chinese import taxes has dropped significantly as a result of China being a member of the WTO, but it is still higher than the cost of import taxes for chinese products being imported into the USA. Yes, one can say that this was done to "protect" the chinese economy as it developed into a open market system (due to differences in labor costs) - but I think that it's time to re-evaluate that position. China needs to open it's trade doors completely and with very little restriction..........I think that this will make quality control a higher priority and will result in a higher quality product that is sold by chinese companies. Who ends up benefitting from all of this? The consumer - better quality, better products and more satisfaction - at a reasonable price.