Introduction: At a time when luxury brand Cadillac has completed a comprehensive localization layout, a more realistic question is: How much demand do Chinese consumers still have for GM imported cars?
(Text/Pan Yuchen Editor/Lou Bing) A few days ago, a "summons order" suddenly appeared on the official public account of GM China, pushing the once calm import car business to the forefront.
The content of the "convocation order" issued in the name of President Bai Li shows that GM China plans to build a new import car business and recruit talents from all walks of life to co-create.
Subsequently, GM China insiders confirmed the news to the Observer Network Auto Channel (Engine Sight) and further confirmed that GM China is working to establish a new high-end imported car business. Officials said that the business, like a start-up incubated by GM, enjoys a high degree of autonomy and is a completely independent business unit to quickly respond to the needs of the Chinese market.
In fact, at a media conference held in early March, Bo Li had already "spoiled" the change in advance.
Talking about the reasons why GM China restarted its import car business, Bai Li said that although most of the imported cars are niche markets and domestic sales are very small, due to the rich categories, such as full-size SUVs and pickup trucks that represent a diversified lifestyle, it may be attractive to customers in some market segments.
In fact, GM has long been keen to show what Bai Li calls "imported products".
At the China International Import Expo, which has been held for four consecutive years, GM is one of the few overseas car companies that has never been absent. The Chevrolet Silverado pickup truck, Suburban full-size SUV, GMC Yukon and other models that have never been produced in China have also attracted the attention of some Chinese car owners through the stage of the Expo.
However, specific details such as the models and sales channels of GM's new import business have not been officially disclosed. There are still too many mysteries to be solved about how this "passionate and creative" independent business will work.
What should China do?
If GM China wants to rebuild its imported car business, SAIC-GM, a major domestic partner, is naturally an unavoidable topic.
As a representative enterprise of American cars, GM has deep roots with the Chinese market. At the beginning of the reform and opening up, then-president Murphy first proposed to Chinese leaders to jointly produce cars. However, it was not until 1997 that GM and SAIC group jointly established Shanghai GM (now SAIC-GM) to produce localized cars.
However, the original Shanghai GM only had models of the Buick brand, and the remaining brands still belonged to GM China's import sales. Subsequently, GM assigned Chevrolet and luxury brand Cadillac to Shanghai GM to make the latter bigger.
In 2005, due to the sluggish sales of niche brands such as Saab and Opel, GM China included the import business of these brands into the shanghai GM at that time, and unpopular brands such as Pontiac and Saturn also entered the market. At this point, Shanghai GM has basically mastered the domestic and import business of all GM brands.
However, as new models of the three major brands continue to be introduced into domestic production, the localization rate is getting higher and higher, and the demand for the GM import car business in the Chinese market is also decreasing. Ordinary household brands such as Saab and Opel no longer have the value of existing in the Chinese market, and even after belonging to Shanghai GM, they quickly disappeared in China. At the same time, GM itself is also experiencing bankruptcy restructuring caused by the financial crisis. In the second decade of the 21st century, GM imported vehicle sales in China have fallen short of 0.5% of total production.
The initial failure of the GM import car business lies in the limited consumption level of the early Chinese market, and the mainstream family car brands that enter China in the form of imports do not have advantages in terms of cost performance. Therefore, this time GM's new import car business is aimed at high-end models, which seems to be a reasonable choice.
Judging from the general situation in the industry, China's stronger joint ventures will generally take into account the import car business, while in turn, strong overseas car companies will directly take over the sales of imported cars. For example, Audi imported cars are responsible for FAW-Volkswagen, Mercedes-Benz imported cars are controlled by Mercedes-Benz China Sales Company, and Ford imported cars are unified by Ford China after the merger of Ford, Changan and Jiangling.
The situation of the previous GM imported vehicles clearly belongs to the former. According to Qixinbao data, saicel-GM sales company responsible for imports is a joint venture between SAIC Motor and General Motors China Co., Ltd., with a share ratio of 51%:49%, which is slightly higher than that of the Chinese side.
Some analysts believe that it is precisely because of the complete liberalization of the Sino-foreign joint venture share ratio of car companies this year that GM China has moved its mind to carry out business independently.
For the handling of the joint venture relationship, Bai Li also gave an explanation in a previous interview. He believes that GM's high-end import business in China and SAIC-GM's existing business can effectively complement each other, and the two will develop together and support each other, and some of the import business will cooperate with SAIC-GM.
Sword refers to electrification?
Analysts believe that GM China may follow the relatively independent sales model of Lexus, Porsche and other brands in China. However, at a time when luxury brand Cadillac has completed a full localization layout, a more realistic question is: How much demand do Chinese consumers still have for GM imported cars?
At present, the potential GM imports high-end models are mostly large-size pickup trucks and SUVs, and GM is keen to promote these products into China, largely focusing on the demand for this subdivision category of young Chinese family users after the liberalization of the two- and three-child policy. But the paradox is that these models are not only expensive, but also do not match the global trend of reducing carbon emissions and accelerating the electrification transformation of vehicles. At a time when China has been implementing a dual-credit policy for several years and has proposed a "double carbon" goal, it seems like a counter-current option.
In this regard, Bai Li once revealed that the models exhibited by GM during the Expo are expected to enter the Chinese market in the form of imports, but the pure electric version of the GMC Hummer, which was unveiled at the Expo last year, is regarded as the most likely model to be imported and sold.
In fact, in the face of the wave of global automotive revolution, GM is also catering to industry trends such as electrification, intelligence, and automation. According to GM's plan, more than 30 electric vehicles will be launched worldwide by 2025, of which more than 20 will be introduced to the Chinese market.
However, in China, the largest new energy vehicle market, GM's layout at this stage is still relatively limited. In recent years, GM has only listed new energy vehicles such as Buick Micro Blue 6, Micro Blue 7, and Chevrolet Chang Tour in China, and the market response has been flat. As competition in China's auto market intensifies, and its own brands and Tesla have taken the lead in the long-distance race of penetration in the new energy market, the opportunities for traditional joint ventures such as GM seem to be getting smaller and smaller.
Bai Li explained that GM China will "take a two-pronged approach" to electrification transformation. One is SAIC-GM-Wuling's GS EV platform, which focuses on low-end micro-electric vehicles, and has long occupied new energy sales since its listing.
But more importantly, the pure electric platform Ultium "Aotene", which was released last year and has high hopes for GM, the first luxury model based on the platform, cadillac LYRIQ, was pre-sold at last year's Guangzhou Auto Show and put into production by SAIC-GM's plant in Jinqiao, Shanghai.
Using the Aotene platform to highlight the brand value of the electric vehicle camp and gradually penetrate the mainstream family car market such as Buick and Chevrolet is the main policy of GM to expand electrification in China. In addition, potential imported vehicles, including Hummer EV and Chevrolet Silverado EV, are from the Aoteneng platform, and they are the first to be introduced into domestic sales, which seems to solve the problem of high-end and electrification of GM, and also pave the way for potential domestic products in the future.
However, under the premise of a serious shortage of existing electric vehicle production and sales, will GM choose to increase the layout of the import business, will it form a tilt on the domestic electric vehicles that have not yet formed? This question remains puzzling until the formal product planning is out.
Take a look:
After achieving a record 2021 financial report with multiple indicators, GM Chairman and Chief Executive Officer (CEO) Mary Bora specifically mentioned the help from China in her letter to shareholders, saying that the strong financial performance will help GM accelerate its transformation and build a new format for electric vehicles and autonomous driving.
In 2021, GM sold a total of 2.9 million vehicles in China, basically the same as the previous year. Among them, Wuling with the Hongguang MINI EV model of the rapid growth, Cadillac over the previous year slightly increased, but Buick, Chevrolet and Baojun have a significant decline.
According to GM's product planning this year, more than 20 new and redesigned models will be launched this year, focusing on high-end luxury products and new energy markets.
Perhaps in GM's view, restarting the import car business and dominating the independent business model is an important chip to accelerate the brand value and electrification transformation, and it is also conducive to expanding revenue in the Chinese market. But in the final analysis, how many products that car companies can come up with that meet the needs of Chinese consumers is the key to whether the new business can successfully gain a foothold.
In addition, under the influence of Sino-US relations, the epidemic, the supply-side crisis such as chips, and the situation in Russia and Ukraine, there are still many uncertainties about the prospects of GM's restart of the import car business in China, and how GM coordinates with SAIC motor in China is also testing the wisdom of the top management of all parties.
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