While the rest of the world is experiencing an onslaught of the Chinese made goods, American auto giant GM is dreaming of just the reverse. Growing incomes and a huge middle class market that is thirsty for made in America cars has given GM hope to aim for 10% of the luxury car market in China. It is not just GM but many other American auto makers are nurturing similar dreams. Among these is Ford that does not seem to be doing well right now. But overall, American companies plan to sell around 2.5 million cars in China riding on the craze for American goods in China.
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In the first half of the current fiscal year, GM has already sold more than 1.2 million cars in China. This has encouraged the bosses back in America who now have set a higher target of selling around 3 million cars annually in the Chinese market ina few years from now. This is really surprising for many analysts as the company has sold lesser cars in US this year (1.08 million) than in China. General Motors has been building its presence in Chinese markets through a well planned strategy where it positioned its various brands in direct competition to other brands selling in China. These brands include Chevrolet, Buick and the higher priced Cadillac. The company is all set to increase its market share through its 4th brand Baojun that eyes the lower price car segment in China.
Till date, GM could sell its expensive car Cadillac in China through imports only. But it has finally won the approval of the Chinese government to build a plant to manufacture these cars inside China. This plant will take an investment of $1.3 billion and will have a capacity to make 150000 Cadillac cars annually. The profits of GM are sure to swell by this move as till now it had to pay high import tariffs set by the Chinese government. Also, the same Cadillac will be more alluring to the Chinese because of a lower price tag. It is too well known that Chinese are price sensitive much like the Indians.
It was the well positioned Buick that saved GM from facing the same fate of Pontiac and Saturn. Buick has been the
flagship brand of the company having sold around 4, 50000 units in 2009 alone. This is many times more than sales in US where Buick is barely breaking the 1,00000 mark annually. Buick is considered a status symbol by upwardly mobile business men and executives. The success of Buick has helped GM to think of strengthening its presence in China. So fond are the Chinese of Buick that GM has been making changes in the features of this car to suit the tastes of the Chinese buyers.
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After Buick, it is Chevrolet that has been a success story for GM in China. And now, with the opening of a new plant for making Cadillac, GM hopes to capture 10% market share of luxury cars in China sooner than later.
