GM Wows China – But Still Fixing America

April 23, 2007

“Our goal isn’t to survive another ten years and keep winnowing down,” General Motors Chairman Rick Wagoner told at an appearance at the Shanghai Motor Show, on Friday.


The CEO of the world’s largest automaker said his top priority remains fixing GM’s troubled North American core, reversing steady declines in sales, market share, and profits that have indeed forced the company to steadily whittle back both aspirations and production capacity.


But following the preview of a new Chinese concept car, the Buick Riviera, Wagoner also made it clear that growth outsideNorth America is critical to maintaining GM’s narrowing sales lead in the competitive auto industry and its long-term viability. The question is whether GM’s own Chinese ally may be gearing up to take on the giant U.S. maker.


“We’re not going to sacrifice tomorrow for today,” Wagoner said, during an interview with and several other reporters.


The Riviera is a prime example of GM’s changing global face. The name is clearly familiar to American motorists because, from 1973 through 1999, the automaker’s Buick division sold more than a million of them. But the Riviera fell victim to declining demand and was abandoned along with an assortment of other Buick models.


Recognizing GM can no longer support so many independent marques, the company has been consolidating some weaker brands into new distribution groups. In the case of Buick, it is being paired with the equally-troubled Pontiac and the stronger, truck-focused GMC division. By reducing duplication of products, Buick now has only three models in the U.S., and likely wouldn’t go over four, Wagoner explained.


It’s a very different story in China, however. Due to an accident of history – former Communist leader Chou-en Lai was a fancier of classic Buicks – the brand got an early start once China began opening up and modernizing its auto industry. Today, Buick is the country’s number-one brand, with a rapidly expanding lineup. In fact, more of the brand’s products were sold in the Asian nation, last year, than in the U.S.


That doesn’t mean Buick will fade away in the States, Wagoner asserted, adding that, “Doing well in China has actually enhanced the viability of Buick in the U.S.” Meanwhile, GM sources told TheCarConnection that the automaker is going to watch closely the public reaction to the Riviera concept. A strong response could see a version of the edgy show car land a spot in the product lineup on both sides of the Pacific.


Wagoner acknowledged that GM was, to some degree, lucky landing a joint venture, a decade ago with Shanghai Automotive Industry Corp., or SAIC, with which it today produces a variety of brands and models in China. The successful partnership helped GM rack up sales of 289,000 vehicles in China during the first quarter of 2007. That compares with 900,000 in the U.S., and makes the emerging nation GM’s second-largest global market.

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