Monday, 4 May 2009

From Michigan to Guangdong


If your sales grew last month by 25% in the largest car market in the world (at the moment) ; if you were No 2 in the market behind a faltering market leader; if you had beaten the Japanese nicely; if your two most famous brands are household names and aspirational in the market; if your other American rivals are nowhere in sight; you should be over the moon - Right?

Wrong - for this company is GM China. And because of the troubles a continent away.

GM has got everything right in China. Its beaten the Japanese. Its beaten the other Americans hollow. Volkswagen is the leader because of historical reasons ; they came into the market very early. They once had a market share of 50% - which is now down to the teens.

Just pause for a moment. Worldwide the car industry is in doldrums with the bottom falling out of sales. And GM China announces that in March their sales grew by 25% over last year. Wow !

So here's a wild thought for GM. Get out of the US and move your headquarters to China. Become a "Chinese" company. In the country which is the largest car market in the world. In the country, which, without doubt, will be the fastest growing car market for some time. And in the country where you have a star subsidiary while the parent is in the geriatric ward.

Sure there are a host of issues. Local competition is heating up. You still can operate in China only through joint ventures. Profit margins are being squeezed. etc etc.

But the view from Guangdong is a lot better than the view from Michigan. Nǐ lái zhōngguó ma ?

4 comments:

le embrouille blogueur said...

Ramesh ... one of the signs that the Big 3 is over is when you see Japanese cars in rental car parking lots.They should consider moving HQs...like you said ..good one.

Ramesh said...

Japanese cars in rental parking lots ? In Michigan ? What has the world come to !!

Hang said...

GM China is doing really well in China. Chinese auto makers like Cherry and Geely are growing fast. Future competition will be even tougher.

Ramesh said...

Thanks for visiting Hang. Yes both Cherry and Geely are growing very fast and will provide tough competition. GM has no future in the US - they are better off coming to China.

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