GM Says It’s Planning Chevy Push in China as VW Threatens LeadBloomberg News
General Motors Co. said it plans to step up promotions of the Chevrolet brand in China and bolster the line-up of GM’s sport utility vehicles to defend its lead in the world’s largest auto market.
“We got still a lot of mother brand-building to do for Chevrolet and we will resource that appropriately and get that job done,” China Chairman Tim Lee, who was appointed to the newly created role in August, said in an interview in Shanghai last week. “If there were one thing that I wish we had done different, I wish we had a better offer” of smaller SUV models.
Boosting Chevrolet sales in GM’s largest market is crucial to Chief Executive Officer Dan Akerson’s goal of establishing the brand as the automaker’s global volume marque. Chevy sales growth in China this year has lagged behind the industry’s 14 percent, while SUV deliveries have surged 45 percent, according to data from the company and China Association of Automobile Manufacturers.
“It’s a brand that has a total history in the country of about seven or eight years, so based on that relatively short time in the marketplace, our brand awareness is good, our product consideration is good,” Lee said. “But can it be better? I guess.”
Though GM was the top-selling foreign automaker in China last year, Volkswagen AG has pulled ahead in deliveries during the first three quarters. Chevy deliveries rose 3.3 percent to 472,561 units in the country, compared with the the 606,330 Buicks sold. The automaker also counts the Wuling brand of mini-commercial vehicles and low-cost Baojun nameplate produced at its local joint ventures among its stable of China marques.
“You want to be a leader in as many categories as possible,” said Klaus Paur, Shanghai-based global head of automotive at Ipsos, a market-research company. “That means obviously, you have to do a lot of things.”
To spur demand, the automaker will introduce a new generation of its Chevy Cruze compact -- currently starting at 108,900 yuan ($17,900) -- next year, said Bob Socia, GM China president, in the same interview. GM sells eight Chevy models in China, all sedans except for the Captiva SUV, which retails from 219,800 yuan.
The company is also working on building up its luxury Cadillac brand’s sales in China by producing the ATS locally next year, Socia said. GM said last month that it will start sales of imported models of the ATS this quarter.
Imported vehicles attract a 25 percent customs duty, making them less competitive against similar models that are produced locally.
At the Shanghai auto show in April, the carmaker unveiled plans to spend $11 billion through 2016 on expanding in China. GM estimates the four new assembly plants will, when completed, boost annual capacity to 5 million vehicles -- double the number of cars it sold in the U.S. last year.
GM will use the Chevrolet brand to spearhead its expansion into China’s smaller cities and western region, where rising incomes are creating a new class of consumers that are able to afford cars, Lee said.
The automaker is adding a total of 1,000 dealerships in western China across its brands by 2017, Socia said. The company will have 4,200 dealerships in China by the end of this year, according to the company.
— With assistance by Alexandra Ho