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General Motors Adds A Brand, Launches No-Frills Sedan In China

July 19, 2010

Here in the U.S., General Motors and its chairman/CEO Ed Whitacre have sold off brands -- or at least tried to --  like they were going out of business. In China, however, where the economy is robust and the auto market remains strong, GM has launched a new car brand to lure lower-income and first-time buyers into showrooms.

The brand is called "Baojun", which we're told translates as "treasured horse". It's a product of GM's joint venture with Chinese manufacturers SAIC and Wuling, which was created to produce microvans for Chinese businesses. Baojun's first vehicle will be a no-frills mid-size sedan based on the Chinese-market Buick Excelle, which is closely related to the Chevrolet Cruze.

Baojun officially launched at a press conference yesterday, and work on the sedan is already well underway, although definitive photos of the vehicle are hard to come by at the moment. This spy shot comes via China Car Forums and may or may not be accurate, though it certainly shares some features with the Cruze.

Rumored spy shot of Baojun mid-size sedan

Rumored spy shot of Baojun mid-size sedan

Our take? Here in America, General Motors has been harshly criticized for being too bloated, too encumbered with brands and bureaucracy to address problems and adapt to changing consumer needs. To be fair, GM has worked to address that over the past two years -- though also to be fair, GM didn't have much choice in the matter, given the global economic meltdown.

In China, however, it's a different story, and GM's actions could prove very, very profitable. As we reported last week, China's auto market may not be as hot this year as it was in 2009, but it's still on the upswing, and the distribution of wealth continues, most analysts agree that it will continue to grow for the next several years.

Moreover, the fact that Baojun will offer a low-priced vehicle seems very savvy for GM, especially given that over 70% of Chinese buyers drive off the lots having paid cash on the barrel. Making the sedan attainable without financing -- and linking it to the Buick brand, which enjoys widespread popularity in China -- seems destined to pay off down the line.


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