Ramblings for Apr. 3, 2000

April 3, 2000

China expands, the West waits

One of the most watched and most difficult car markets is China. The U.S. and European markets are essentially flat but China's growth is just starting, with the demand expected to increase 35 percent in the next decade.

The Chinese have been resisting exploitation, insisting on joint ventures with the intent on building their own skills and supporting industries. One of the earliest ventures was an American Motors Jeep plant, Beijing Jeep, now part of DaimlerChrysler. It builds Jeep Super Cherokees and BJ2020 series. As for the others, two VW plants have sold more than 200,000 cars each year, which represents a 60-percent domestic market share. Toyota is in negotiations for a small-car project. Ford has launched the Focus and the Puma Coupe and is pitching a sport-utility concept vehicle using fuel cells. And the Transit series jointly manufactured by Ford and Jiangling Motor Company has become the best-selling light commercial vehicles in China.

General Motors is a step ahead of the game, it seems. With the completion of the first Buick GL8 wagon, Shanghai General Motors (Shanghai GM) is the first automaker in China to make two distinct vehicles on the same production line. The GL8 wagon is the second product for Shanghai GM, the 50-50 joint venture of General Motors Corp. and Shanghai Automotive Industrial Corp. The wagon's spaciousness allows flexible seating for seven to eight passengers and can be easily converted into a bed, tea table or a spacious area to serve as a mobile office or a meeting room. The Buick GL8 shares the 3.0-liter V-6 engine with the Buick sedan, sized to meet tax requirements in China. The Buick sedan faces challenges from the Audi A6, jointly produced by the First Automotive Works and Volkswagen, and the Accord sedan made by Guangzhou Automobile Corp and Honda.

There is a historical aspect to the venture. Buicks were built in Canada and in the years before World War II, Buick components were shipped to Spain, Belgium, England, Australia and Java, where assembly was completed. Buick made its name in China as early as 1929, and the last emperor of China drove a Buick. Now, Buick expects to make some 50,000 vehicles in China — a long way down the road from those first ambassadors.

Marketing, the eternal frontier

Image branding has become a popular means of enhancing sales, and clothing suppliers Eddie Bauer and Orvis have arrangements with Ford and Jeep, respectively. (Does anyone remember the Levis Gremlins and Pacers?)

Now Subaru of America and L.L. Bean have entered into a multi-year, strategic marketing partnership. A 2001 Subaru Outback Limited Special L.L. Bean Edition will be available in the United States and Canada. The Special L.L. Bean Edition will feature an exclusive L.L. Bean appearance package, badging and a special 1-800 customer assistance number.

In the more mainstream market, Lands' End, the largest online seller of apparel, has launched an Online Custom Store for Saturn Corporation. The Saturn Online Custom Store will be accessible via the Internet to over 400 Saturn retailers nationwide.

Saturn owners have the opportunity to purchase Lands' End Saturn signature apparel at their local Saturn Retail Stores. The Saturn Custom Store will offer a broad selection of business casual apparel for men and women including mesh shirts, denim shirts, cotton sweaters and Polartec jackets with the Saturn signature.


Bob welcomes comments or questions at bstorck@sprynet.com.

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