Think that GM won't be focusing MORE on China in the coming years and gearing its products as much or more for that market as this one? Think again.


GM's China sales pass US for first time in history

http://finance.yahoo.com/news/GMs-Ch....html?x=0&.v=2


It ain't your father's world anymore.

 

Get used to be know as second place or #2.

 

I bet they sell more Japanese cars here than they do in Japan and it doesn't bother the Japanese one bit.

 

I remember reading about Buick sales being strong in China as a reason that they were retained when Pontiac was dumped.

 

Let's see if I have this straight. A U.S. company is selling products in China, which helps the balance of trade, and this is a BAD thing? How?

 

Yes, but the U.S. ain't Japan and China ain't the U.S. The situations are not comparable.

In spite of what we've been hearing about the growth and strength of the Chinese economy, it's still only two-thirds the size of the U.S. economy. The Chinese annual Gross Domestic Product is just under $10 trillion while ours is just under $15 trillion. Japan's economy, by contrast, is about $5 trillion.

The point is, it has long made sense that a smaller economy like Japan's would sell more of not just cars but many of it products overseas than it does at home. Ditto for countries like South Korea and several dozen other relatively small countries we could name. This is their lifeblood.

But what does it say when a U.S. manufacturer on the scale of General Motors can sell more of its product to a significantly SMALLER economy than it can to it's own home country? I'm not sure exactly what's wrong with this picture, but it just doesn't feel right.

Maybe in 2030 or 2050, when the Chinese economy finally does surpass ours in size this would make more sense. But now?

 

Hey! Finally a question I can answer. Actually, even when they fudge the numbers and count all of North America as "us", we are the THIRD-largest car-buying market behind China (just the one country) and India (ditto) for ALL makes, including GM.

To be fair, these are countries that didn't even HAVE car markets a decade ago, so they're scrambling to catch up. Once a "saturation" point is reached, however, we will be back closer to the top as we have a higher "turnover" rate than these "gotta-have-a-car-right-now-and-will-hold-onto-it-forever"-style Near and Far East markets will.

At least that's the theory.

Oh, and yes, China saved Buick. GM had every intention of positioning Cadillac as its premium Far East nameplate, but when they saw that they couldn't hit the target MSRP with the CTS--the only car in the pipeline in sufficient numbers to sell in China--they plugged Buick in instead.

BTW, in China CHEVROLET is sold at a premium, too, as its--wait for it--"QUALITY REPUTATION makes it superior in the eyes of Chinese buyers to inferior Japanese and Korean makes."

Go USA! [Just not actually IN the USA...]

Drew

 

Also remember that Buick was a well regarded brand in China prior to WW2.

 

I don't know that it can be put this simply. Buick, which sells a lot of cars in China, exports only the Enclave from the U.S. to China. All the other models it sells in China it makes there. Sure, some fraction of those sales dollars flow back to the U.S. But this is not as beneficial to the U.S. economy as it might initially seem. No U.S. jobs are saved or created.


Hey, I'm not saying that this turn of events is terrible or even a little bad. China has five times the population of the U.S. Even if the output of the average Chinese citizen were only half that of the average U.S. citizen, China's economy would be larger. That's inevitable as the their economy continues to grow.

But the world did tilt slightly on its axis today.

 

Just a comment regarding the Chinese economy. Wow have things changed in the past 20 years. I have a girlfriend from China who has told me about how poor her family was when she was a kid. Now there are so many people like her who have a completely different lifestyle and are able to buy things they could only dream of when they were kids.

There is a lot of new money going to the average chinese now and their attitude is somewhat fanatic. Sometimes buying things that are new and better simply because they can. It will be interesting to see how things play out in the next 20 years.

 

Here's how GM says it:
"The relationship between Buick and China goes far beyond sales figures and dignitaries though. GM and Shanghai Automotive Industry Corporation (SAIC) signed a joint venture agreement on March 25, 1997, in China's Great Hall of the People. A plant was built, and the first Chinese Buick was driven off the assembly line on Dec. 17, 1998."

What they're trying desperately NOT to say is that the true meaning of the above is that NO FOREIGN CAR MANUFACTURER MAY ENTER THE CHINESE MARKET "ALONE". To sell cars AT ALL there you have to join--as a MINORITY partner--an existing Chinese car company. So shave a few more points off the assumption of "American" company profits.

[Oh, and with copyright law what it is there--which is nonexistent if it's the Chinese doing the violating--they have no fear of GM or anyone else making a stink about how much/little they're actually MAKING off this deal (as VW found out when their partner took future VW designs and dropped the German firm in favor of introducing them itself...).]

I've driven all of the Buick models and they're not bad. They're not particularly RELEVANT here, either, but that's not exactly news for GM these days...

Drew

 

The Chinese hate the Japanese because of WWII. I could see that when I was there. It's passed down from generation to generation. However they do like German made goods and have a strong history with them. They will buy Japanese if they have too, however if given a chioce, they would rather buy other than Japanese if they can.

 

This is the opposite argument for foriegn cars built in the US. By that logic, Honda, Toyota, Mercedes, BMW, etc built here are better for the US economy than GM. People complain about that, too. Which is better?

Dammit, Jim, I'm an engineer, not an economist...

 

Gm bought a few european car manufactories like opel, and bought a factory and renamed the brand into chebby.
(chebby matiz etc)

so over here a lot of cars are " gm " (or a part of it)

every one can complain at something, for me, a brand named DAF designed the variomatic transmision.
now the car factory doesn't exist anymore, but it seems a lot of brands are now showing there kind of variomatic transmision's.
Daf automobile is out of bussines for more then 15 years

 

How true. The biggest benefit is that the profits GM makes in China helps keep GM here going strong. Unfortunately, we are not making cars here in droves and exporting them to China. That would really help our economy as it would reopen factories and put more of our people back to work.

Good question Joe. The best thing, imho, would be for an American company, ie GM, Ford, Chrysler to be developing and manufacturing their products within our borders. That would help out our economy the most. Yes foreign companies making their products here help as well but the profits go back to their prospective countries and they import a lot of their parts from overseas. (lower domestic content)

 

What was the old saying "What is good for GM is good for America", now change that to" America bailed out Gm and what is good for Gm is good for Gm only"

I despise that company.

 

They probably are better. It's not a happy choice, but which actually IS better:

1. A U.S. owned and based company builds products in a foreign country to sell in that foreign country.

2. A foreign-owned company builds products in the U.S. to sell to U.S.-based customers.

3. A U.S. owned and based company builds products in the U.S. to sell to U.S. and foreign customers.


Obviously, #3 is best for our economy. But of #1 and #2, I'm not so sure. #1 benefits company executives and shareholders, while #2 benefits rank and file workers.

It's not always easy to say which is better. People tend to argue #2 because it benefits "working families." But "working families" also can own stock or invest in mutual funds or have retirement plans that invest in stocks, so they're shareholders, too, and they benefit when shareholders benefit.

 

Right, and when GM builds cars in China, the profits come here, get taxed, and are used to repay the gov't loans.

 

Actually, the reason that GM was bailed out was precisely BECAUSE what's good for GM is good for America.


By the way, like "play it again, Sam," which was never actually said in any movie by Humphrey Bogart, and "Judy, Judy, Judy," which was never actually said in any movie by Cary Grant, no one ever said "what's good for GM is good for America."

What REALLY happened is this: The head of GM, Charles Wilson, was being considered for Secretary of Defense in the newly-elected Eisenhower administration back in 1953. During his confirmation hearings, he was asked "could you make a decision that would be of benefit to America if it would be adverse to GM?"


His answer, word for word:

"Yes, sir, I could. I cannot conceive of one because for years I thought that what was good for our country was good for General Motors and vice versa. The difference does not exist."

It was that "and vice versa" that everyone seized on. The newspapers quickly construed that to the now constantly-quoted "what's good for GM is good for America," and a legend was born.

 

So what, you get the idea no matter if the saying was legit or not. Gm was a huge part of the economy at one time as well as being as American as apple pie.

 

Hey, I'm not saying your statement wasn't legitimate. I was just taking a minute to point out the actual origin of that comment.

 

Even though we'd like our home grown companies to do everything they could to benefit the working man, I'm not surprised when they don't.

Thinking about Michael Moore's "Roger & Me" talking about GM laying off American workers in favor of cheaper labour from Mexico during a time of record profits.

The way things go, the rich are mainly interested in getting richer. LOL, of course, that's how they got rich in the first place, it's in their nature. Maybe the system needs some tweaks to make sure the common guy is not screwed over by these big companies. It's in the nature of any company to want increased profits, and if the system allows them to do that without any moral consideration they likely will. It is up to government to look after the people in their country, and we do have a choice who governs us. Right?

 

Actually the Chinese GDP is more like $5T and I believe you are correct about the USA GDP

 

Joe - Exactly !!!!!

 

So, lets see China is on a car buying binge. OK, good for them - bad for oil prices, but that is another thread. The way I see it is at some point once they've satiated their appetite for the basic car they'll want more.........so what is more? What will they want? Answer = Muscle Cars !!! Just like it happened here!! You guys want to open a muscle car shop in China with me?????

 

Sounds like a pretty good idea! Although....

I was reading that China is having a huge problem with traffic jams, dwarfing anything we see around major US cities. They showed footage of people parked on the roadways, not even moving an inch forward in hours. At the rate that they are adding cars on the road over there, how long will it be before many people decide buying a car is not a good idea?

 

This is good news in my opinion.
People have this misconception that GM needs to abandon the global market during the changes we're facing with globalization.

The cars built there = profits for GM.
Profits for GM (American car company) come to America & get taxed, and help pay the legacy costs of all the American UAW workers retired. So I can't fathom how people feel it's a bad thing. American car companies are PROFITING.

Toyota became the #1 global car company many years ago , but only RECENTLY did they finally take over America also as the #1 spot. GM has to compete on the global level. These sales will help us.

If all American companies took advantage of global markets exclusively, this nation (USA) would be filthy rich. As to why China is selling more then we are here, it's pretty obvious their 1.1 Billion population is ~4x that of the USA's. Plus their market has skyrocketed in the past 10 years since the 2000 Chinese Trade Agreements were signed with the USA. That's a HUUUUUUGE market of new car buyers.

The graph tells the tale.
http://www.google.com/publicdata?ds=...en&q=china+gdp

As for China's $5 Trillion GDP being lower then our $14 trillion GDP ? It's not even remotely that simple.

Their cost of living is far lower then the United States, as is their labor and cost of materials. Therefore if the 7 to 1 exchange rate (Yuan to USD) was equivalent, they'd be far ahead of us, but they are manipulating their currency to keep raking in the dough while we sink further and further. In other words, China's $5 Trillion in GDP far exceeds our $14 trillion in GDP which also includes PHANTOM GDP to skew the true numbers.

 

Just a note on GM overseas. Here in Thailand all the Chevys you buy come with Isuzu engines.

 

That's funny, because here's it's the opposite.
Not surprising.

My wife's 2004 Isuzu Ascender was built in Moraine Ohio with the rest of the GMC Envoys.
Same GM 4.2L I6 that was on the Wards 10 best engines list 4 years consecutively as well.

Only thing different is the badges.......and the market values.
We got hers 3 years used , 4x4 with 33K for just $11,900 mint condition.

 

Just the opposite here. The used Isuzu trucks hold their resale value and the Chevy trucks with the same drivetrain do not.

 

Are you kidding. Have you every been on an L.A. freeway, the Jersey Turnpike or the L.I Expressway............that has never stopped Californians, New Jersians or Long Islanders from buying more cars then they need.

 

No, but this was:



[Actually, my parents were born two years AFTER this, but it still holds true.]

Oh, and I'm sure its purely coincidence, but if you look at the flags you'll see that all three mounted up front were for divisions GM later shuttered. SPOOOOOOOOKY!

 

True, but I think OLD SKL 69 still has a point.

We've already heard stories of traffic jams on Chinese highways that last for days. While we have traffic jams here, I've not heard yet of ones lasting that long.

Also, this is already taking place in a country with a far smaller automobile ownership rate on a per-capita basis. If the number of cars on the road in China ever grew to the point that it matched the U.S. on a number-of-cars-per-person basis, then their days-long traffic jams of today could easily look like the good-old days, and it might cause them to rethink a bit about becoming a car-dominated society like ours is.

 

Joe,

I don't know if it's true with GM but just about every agreement that China makes with companies to set up plants and produce a product there ends with China owning all rights to the plant once the agreement is up. That's how China now makes knock-off Honda engines & just about everything else. It's a great short term arrangement for companies to produce a cheap product. The problem is when the agreement is over the companies have to compete with themselves & it's not like they're going to import Chevies there once the Chinese gov't is making them. This is just part of the long slow death of GM (or re-birth of it as a chinese company), You'll see....

 

Actually, that's EXACTLY what's ALREADY happening, just with Korea, not China. (Yet.)

All of Chevy's small(est) cars are built in Korea by Daewoo and IMPORTED by us. There's no reason to doubt the fact that if they can make the numbers make sense that they'll build EVERYTHING in China.

But as I mentioned up a bit higher where I covered the Chinese "partnership" situation, most car companies don't feel "safe" to transfer plans to Chinese plants for manufacture as all foreign makes have to be MINORITY partners in an existing Chinese car company.

Oh, and copyright law is looser than a *****'s morals in China, so nobody wants to squawk too much about the arrangement as they'll find themselves on the outside looking in (at their own designs being knocked-off).

Then again, the Chinese government reserves the right to "nationalize" everything in its country at any time, kicking everyone out and keeping whatever's there, be it car factories or bank accounts (just ask the mobsters of the late 1950s what it was like when Cuba did that).

Fun, fun, fun!

 

The Chebby Aveo, made in S. Korea, is being replaced by a new small car made in the U.S.

 

The Chevy Sonic is STILL Korean designed and is only being built in the US (at increased cost) because Government Motors can't be seen to be moving jobs offshore by their major shareholder.

I find it depressing that not only can't GM design small cars in the U.S. they can't design V8 powered RWD cars in the U.S. anymore, either.

 

Wrong, this is how it happened.

http://www.wsws.org/articles/2010/oc...lake-o21.shtml

 

The US Government is the LAST organization that can talk smack about China. Considering our trade deficit and dependence on Chinese-made goods of all kinds, NOBODY in power is stupid enough to **** them off or they have the power to hammer this economy harder than OPEC.

All that's happened is that GM's "shareholders" are now worried more about POLITICAL capital than the $$ kind, and their actions are showing it.

I'll be interested to see what the opposition will say about ALL of the bailouts when the 2012 election season comes around. Obama will still win, but I'll bet GM's "new" problems--those that WILL come thanks to decisions like this Sonic fiasco--might make a few town hall meetings interesting...

 

Good point.
Many Major cities in China are overcrowded. So are LA's expressways which I think is America's absolute WORST besides Atlanta......and they keep buying cars. It's been that way for a few decades now too. People LOVE their personal auto's. Space is the key factor in China......parking and space is the limitation. The OTHER biggest problem is INFRASTRUCTURE unable to keep up with growth. I'm talking about highways, roadways, etc. You won't see many families in China with more then 1 car, but there's still MILLIONS without a vehicle.

However one of the coolest things about China is the MAGLEV train (Magnetic Levitation) that does 270mph (up to 311mph) on a monorail of magnetic fields. It literally never touches the guideway, hovering 15cm above it while propelling forward at lightning speeds. The infrastructure was built in Europe and improved upon in Shanghai where the market is skyrocketing. This is basically the next generation that supercede's Japan's Bullet Train. America needs something like this, because I'd MUCH rather take a MAGLEV train then an airline flight personally.