General Motors Tunes Up China Plans
General Motors expects China to overtake Japan as the
world's second largest auto market in the next few years,
but it is canceling production of its Tahoe and Trailblazer
sports utility vehicles.
The two vehicles were to have been produced at the Jinbei
plant, which is a joint venture with Shenyang Brilliance
Automotive Co. Ltd., Liaoning Development Group, Liaoning
Energy Group and Shenyang Auto Industry Asset Management
Co. General Motors holds 50 percent of the joint venture.
It began producing the Chevrolet Blazer SUV and S-10
crew cab pickup trucks in 2001. The plant sold 3,200 vehicles
in 2003, which is 10 percent of capacity, and ended the
year with 700 vehicles in inventory.
General Motors other investments in China have performed
much better. John Devine, General Motor's chief financial
officer, said that overall vehicle sales in 2003 were
4.4 million, compared to Japan's 6 million. This was an
increase of 35 percent over 2002. He said that he expected
China to maintain double-digit growth in the next few
years. He added that he expected the three largest foreign
auto makers in China to benefit from approval of vehicle
financing.
In the US, GMAC, General Motor's auto financing arm,
is more profitable than its auto manufacturing business,
contributing nearly two-thirds of its annual profits.
GM's joint venture with Shanghai Automotive Industry
Corp (SAIC) had an inventory of 4,000 cars at the end
of the year, or about six days worth of sales.
GM is trying to restructure the Jinbei joint venture,
and is trying to get SAIC to join, in the hope that Jinbei
will become competitive.
Another problem for GM is design piracy by Chery, which
is based in Anhui province. Two designs were allegedly
stolen from its South Korean subsidiary Daewoo, and launched
in China before General Motors could launch them in the
Chinese market.
Design and copy infringements have been a major problem,
and Toyota lost a high-profile case in China's courts
last year. Generally speaking, Chinese courts do not subscribe
to nearly as tight copyright and trademark restrictions
as are allowed under US law.
Before you go, did you like this article?
If so, you can receive a free email newsletter version
each weekday. Sign up using the China Business Express
form on this page.
