WSJ: GM Loses Ground to Toyota and Honda in China
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GM's Car Sales Slide In China --- Toyota, Honda Zoom Ahead As Buyers Concentrate On Fuel Economy, Quality
By Norihiko Shirouzu
26 September 2008
The Wall Street Journal
(Copyright (c) 2008, Dow Jones & Company, Inc.)
Beijing -- General Motors Corp., which regards China as one of its few bright spots as the U.S. auto market slides, is seeing its star dim among Chinese passenger-car buyers.
The Detroit auto maker -- long China's No. 2 car seller after Germany's Volkswagen AG -- is being outsold this year in the passenger car market by Toyota Motor Corp., according to J.D. Power and Associates.
The U.S. consulting firm predicts Toyota this year will outsell its American rival in the passenger-car market by nearly 84,000 vehicles, selling 582,800 cars to GM's 498,877. The figures exclude minivans, trucks and other vehicles.
J.D. Power expects GM's China sales of passenger vehicles may contract as much as 5.5% this year, its first decline since 1999. Other forecasting companies such as Michigan-based CSM Worldwide offer similar projections.
The turnabout comes at a time when Rick Wagoner, GM's chairman and chief executive, has argued that the company's rapid growth in China, among other emerging markets, would help offset U.S. market share losses, even though China remains a small portion of GM's total sales.
China's auto market has exploded in recent years. It is already the world's second largest by units and is projected to supplant the U.S. over the next decade. Passenger car sales are expected to grow about 10% this year, though that's well below the 24%-plus rates of the past several years.
GM's problems in China are remarkably similar to those it faces in the U.S.: a less-than-stellar reputation among consumers for fuel efficiency and vehicle quality.
GM officials say they aren't overly concerned about slower sales of passenger cars in China because the company also sells other types of vehicles. The auto maker says it sold 1.05 million vehicles in China last year -- more vehicles than any other company -- including micro minivans and trucks produced and marketed by GM's three-way joint venture in southern China with Liuzhou Wuling Motors Co. and Shanghai Automotive Industry Corp.
Looking only at the passenger car market to gauge GM's performance in China is tantamount to "shutting a blind eye to huge segments in [China's] market, especially in the rural, second-, third- and fourth-tier markets," said Rob Leggat, a GM spokesman, in an email response. "To many small-business owners, farmers and rural families, it makes more sense to purchase a mini commercial vehicle to service both their private and business needs."
Still, industry watchers say, the passenger-vehicle market, excluding micro minivans and trucks, offers a better measure of China's consumer demand. Moreover, they argue that Wuling micro vans and trucks should not be counted fully as GM's own, since GM has just a 34% interest in the joint venture.
GM has a long, storied history in China. The company began producing vehicles here in 1999, one of the first foreign auto makers to enter the country. Buicks are known here as the car that Pu Yi, China's last emperor, once owned and remain one of the most well-known auto brands in China. That connection and an early start propelled GM to a strong number two position in the passenger-car market, which it has held since the beginning of this decade.
But now, Toyota, which had long struggled in China because of its late entry, has seen its passenger-car sales surge 37% this year through August, according to J.D. Power. Honda Motor Co. sales grew 23% during the same period. The boom has hoisted the Toyota Corolla to one of China's top-selling models. GM also faces growing competition from China's home-grown auto makers, including Chery Automobile Co.
"Rightly or wrongly, the Japanese benefit from perceptions that their products are more economical -- a better buy when gas prices are going up and costs of (vehicle) ownership are on the rise," said Michael Dunne. J.D. Power's Asia managing director. "That's a big bonus for Toyota and Honda."
Ha Wei Liang, a 30-year-old Beijing resident, bought a Camry this week. He was preparing to pay the dealer's list price, about $33,600, even though a Buick dealer offered a discount for a Lacrosse car, which he also considered.
"The Camry has better, more fashionable styling," he said. "It also has reputation for better quality and performance, and my friends pushed me to buy a Toyota car."
GM is suffering from a dearth of new and freshly redesigned models this year, said Yale Zhang, a Shanghai-based senior analyst with U.S. consulting firm CSM Worldwide. "GM may pick up momentum with new models next year and in 2010, but that's not going to do much in terms of stopping Toyota," he said.
Toyota has been outselling GM consistently since March. Data compiled by J.D. Power show that through the first eight months of the year GM passenger vehicles were outsold by Toyota's by about 35,524 vehicles, with GM selling 335,353 cars against Toyota's 370,877.
GM continues to invest heavily in China. Earlier this month, it broke ground on a $250 million corporate campus in Shanghai, including a technical center that will study alternative fuels. "In order to be one of the top three or four [auto] companies in the world, you will have to have a strong presence in China," GM's Asia Pacific president, Nick Riley, said earlier this month in an interview. "It's going to be essential to be a strong player here." ---
Patricia Ho and Gao Sen contributed to this article.
By Norihiko Shirouzu
26 September 2008
The Wall Street Journal
(Copyright (c) 2008, Dow Jones & Company, Inc.)
Beijing -- General Motors Corp., which regards China as one of its few bright spots as the U.S. auto market slides, is seeing its star dim among Chinese passenger-car buyers.
The Detroit auto maker -- long China's No. 2 car seller after Germany's Volkswagen AG -- is being outsold this year in the passenger car market by Toyota Motor Corp., according to J.D. Power and Associates.
The U.S. consulting firm predicts Toyota this year will outsell its American rival in the passenger-car market by nearly 84,000 vehicles, selling 582,800 cars to GM's 498,877. The figures exclude minivans, trucks and other vehicles.
J.D. Power expects GM's China sales of passenger vehicles may contract as much as 5.5% this year, its first decline since 1999. Other forecasting companies such as Michigan-based CSM Worldwide offer similar projections.
The turnabout comes at a time when Rick Wagoner, GM's chairman and chief executive, has argued that the company's rapid growth in China, among other emerging markets, would help offset U.S. market share losses, even though China remains a small portion of GM's total sales.
China's auto market has exploded in recent years. It is already the world's second largest by units and is projected to supplant the U.S. over the next decade. Passenger car sales are expected to grow about 10% this year, though that's well below the 24%-plus rates of the past several years.
GM's problems in China are remarkably similar to those it faces in the U.S.: a less-than-stellar reputation among consumers for fuel efficiency and vehicle quality.
GM officials say they aren't overly concerned about slower sales of passenger cars in China because the company also sells other types of vehicles. The auto maker says it sold 1.05 million vehicles in China last year -- more vehicles than any other company -- including micro minivans and trucks produced and marketed by GM's three-way joint venture in southern China with Liuzhou Wuling Motors Co. and Shanghai Automotive Industry Corp.
Looking only at the passenger car market to gauge GM's performance in China is tantamount to "shutting a blind eye to huge segments in [China's] market, especially in the rural, second-, third- and fourth-tier markets," said Rob Leggat, a GM spokesman, in an email response. "To many small-business owners, farmers and rural families, it makes more sense to purchase a mini commercial vehicle to service both their private and business needs."
Still, industry watchers say, the passenger-vehicle market, excluding micro minivans and trucks, offers a better measure of China's consumer demand. Moreover, they argue that Wuling micro vans and trucks should not be counted fully as GM's own, since GM has just a 34% interest in the joint venture.
GM has a long, storied history in China. The company began producing vehicles here in 1999, one of the first foreign auto makers to enter the country. Buicks are known here as the car that Pu Yi, China's last emperor, once owned and remain one of the most well-known auto brands in China. That connection and an early start propelled GM to a strong number two position in the passenger-car market, which it has held since the beginning of this decade.
But now, Toyota, which had long struggled in China because of its late entry, has seen its passenger-car sales surge 37% this year through August, according to J.D. Power. Honda Motor Co. sales grew 23% during the same period. The boom has hoisted the Toyota Corolla to one of China's top-selling models. GM also faces growing competition from China's home-grown auto makers, including Chery Automobile Co.
"Rightly or wrongly, the Japanese benefit from perceptions that their products are more economical -- a better buy when gas prices are going up and costs of (vehicle) ownership are on the rise," said Michael Dunne. J.D. Power's Asia managing director. "That's a big bonus for Toyota and Honda."
Ha Wei Liang, a 30-year-old Beijing resident, bought a Camry this week. He was preparing to pay the dealer's list price, about $33,600, even though a Buick dealer offered a discount for a Lacrosse car, which he also considered.
"The Camry has better, more fashionable styling," he said. "It also has reputation for better quality and performance, and my friends pushed me to buy a Toyota car."
GM is suffering from a dearth of new and freshly redesigned models this year, said Yale Zhang, a Shanghai-based senior analyst with U.S. consulting firm CSM Worldwide. "GM may pick up momentum with new models next year and in 2010, but that's not going to do much in terms of stopping Toyota," he said.
Toyota has been outselling GM consistently since March. Data compiled by J.D. Power show that through the first eight months of the year GM passenger vehicles were outsold by Toyota's by about 35,524 vehicles, with GM selling 335,353 cars against Toyota's 370,877.
GM continues to invest heavily in China. Earlier this month, it broke ground on a $250 million corporate campus in Shanghai, including a technical center that will study alternative fuels. "In order to be one of the top three or four [auto] companies in the world, you will have to have a strong presence in China," GM's Asia Pacific president, Nick Riley, said earlier this month in an interview. "It's going to be essential to be a strong player here." ---
Patricia Ho and Gao Sen contributed to this article.
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Buicks are known here as the car that Pu Yi, China's last emperor, once owned and remain one of the most well-known auto brands in China.
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China's last emperor chose a Buick when he could probably own any car he wanted? Plus, it would've been a last generation Buick which were before the major improvements recently made.
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buick is a top selling brand in china. It figures that GM would slip globally. They are just a weak company. Blood is the water. actually the carcass is almost completely drained.lol
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So Warren Buffet choose to drive a 2 decade old Cadillac when he could of had any car he wanted.
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Buick is a top luxury image brand in China and pretty much like Mercedes Benz is in the US. GM builds and sells higher end more expensive Buicks in China with much nicer higher quality interiors, more features, and better designs then what they sell in the US. If you look around you can see pictures of much nicer interiors in Buicks sold in China that compare very well to Lexus, Acura, and Mercedes interiors compared to the cheaper more lackluster designs of Buicks sold in the US. GM does not want to spend the money in the US to sell the better Buicks here because they will never command higher premiums and Americans would rather buy cheaper Buicks with less impressive interiors where Buicks sold in China sell for much more and the public demands the highest quality to fit the high image Buick has in China.
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There weren't any Buick vs Lexus comparisons back then.
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The last emperor of China had a great fascination with the Western culture. And remember, when the late emperor was exiled out of the forbidden city it was around the early 1920's when there wasn't much to choose from (in terms of luxury cars) at that time.
There weren't any Buick vs Lexus comparisons back then.
There weren't any Buick vs Lexus comparisons back then.
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Buick is a top luxury image brand in China and pretty much like Mercedes Benz is in the US. GM builds and sells higher end more expensive Buicks in China with much nicer higher quality interiors, more features, and better designs then what they sell in the US. If you look around you can see pictures of much nicer interiors in Buicks sold in China that compare very well to Lexus, Acura, and Mercedes interiors compared to the cheaper more lackluster designs of Buicks sold in the US. GM does not want to spend the money in the US to sell the better Buicks here because they will never command higher premiums and Americans would rather buy cheaper Buicks with less impressive interiors where Buicks sold in China sell for much more and the public demands the highest quality to fit the high image Buick has in China.
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I already knew that GM and Ford cared more about European markets than their own US market but I didn't realize they also cared more about the Chinese market as well. Well, maybe someday GM and Ford will start offering the good products that the rest of the world gets (and they wonder why they've lost their home market to the Japanese). ![Egads!](https://www.clublexus.com/forums/images/smilies/pat.gif)
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