TRAVERSE CITY, MICH.-- Establishing personal relationships with Chinese partners is key to GM Chinas future success, said Ray Koopman, director of manufacturing engineering for GM China.
Its important at this point to provide Chinese partners with the right training and clear goals, he said. Part of the training includes instruction in GMs global manufacturing system.
Koopman, posted in China since 1998, described his work as a stimulating and, at times, frustrating experience. He spoke on Tuesday, Aug. 5., at the Management Briefing Seminars.
One of the main challenges in China, Koopman said, is to convince the leaders of GMs joint venture partners to share information more readily and to admit when problems arise. In the Chinese culture, saving face is a huge issue, he said.
Through joint ventures, GM sells 14 models in China. Koopman said he anticipates to increase that number by 20 to 30 percent in the next couple of years, with a focus on entry level sedans such as the $12,000 Chevrolet Spark. Low-end vehicles in China, he said, cost between $6,000 to $15,000. GM Chinas focus, for now, will remain on sedans.
GM is considering bringing the Cadillac CTS into China, Koopman said, adding that he doesnt think the Chinese know the Cadillac brand very well.
GM China sold 264,101 vehicles in mainland China in 2002. Year-to-date 2003 sales there are 164,866 units. GM has about 8 percent combined commercial and passenger car market share in China, but expects to grow.
Volkswagen is the market leader in China, with a 38 percent market share in the first half of 2003.
GM China also is working to increase its manufacturing capacity and further develop its supplier base. It has potential joint venture possibilities to increase its manufacturing capability, but Koopman said GMs strategy primarily is to partner with investment company SAIC. Non-Chinese companies can own a maximum of 50 percent of a joint venture in China. Most of GMs joint ventures already are with investment company SAIC.
GM has four joint venture manufacturing facilities in mainland China: Shanghai GM, SGM Dong Yue Motors, Jinbei GM and SAIC-GM-Wuling.
Shanghai GM, a 50/50 venture with SAIC, makes the Buick Regal, Buick GL 8 executive wagon and mid-sized Excelle sedan. SGM Dong Yue Motors recently started building the Buick Sail sedan and wagon. Jinbei GM makes the Chevrolet Blazer. SAIC-GM-Wuling will produce the Chevrolet Spark.