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GM, VW Battle for Dominance in China

Chinese market regains momentum after showing signs of a slump.

by on Oct.14, 2013

VW is well established in China's Pacific Crescent - but now it wants to target emerging regions of the country to maintain its growth.

Volkswagen AG and General Motors are locked in a bitter duel over sales leadership in China with the edge going to VW during the first nine months of the year.

With China now the world’s largest automotive market, dominance means more than bragging rights. GM already sells more vehicles in the populous Asian nation than in the U.S., and China promises to be a major factor in the bottom line results of most automotive manufacturers going forward.

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VW’s sales in China for the first nine months of 2013 rose 18% to 2.35 million cars and sport-utility vehicles through the end of September. The maker of Volkswagen, Audi and Porsche vehicles is relying on growth in China to offset slumping demand in Europe, where sales are set to drop for a sixth straight year, and reach its goal of overtaking both GM and Toyota to become the world’s largest automaker.

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GM China Chief Kevin Wale Stepping Down

Supply chain boss Socia to take on Asian assignment.

by on Sep.12, 2012

GM China Group President and Managing Director Kevin Wale will retire after nearly 40 years with the maker.

General Motors’ China chief is stepping down – and at a time when an unexpected economic slowdown in the massive Asian market threatens to throw the Chinese auto industry into turmoil.

No specific reason was given for 57-year-old Kevin Wale’s decision to retire though he has been working for the maker for nearly four decades, starting out in his native Australia with GM’s Holden subsidiary at the age of 20.

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Wale will be succeeded by Bob Socia, who has been serving since 2009 as GM’s director of global purchasing and supply chain.

“Kevin has been instrumental in strengthening our foundation in the largest vehicle market in the world,” Tim Lee, GM vice president for global manufacturing and president of GM’s International Operations, said in a statement.

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GM Will Increase Investments in China

“Key to our success,” proclaims CEO Akerson.

by on Feb.17, 2011

GM's SAIC-GM-Wuling joint venture has begun sales of the Wuling Hong Guang, the first compact business van ever offered in China.

If you didn’t know it, China is awfully important to General Motors.

GM chairman and chief executive officer Daniel Akerson traveled to the booming Asian nation, this week, and emphasized that China remains critical to GM’s future – and will continue to see more and more investments dollars.

“As our largest market, China played a significant role in GM’s success in 2010. We will continue investing aggressively in China to ensure the long-term success of our company.” Akerson said.

GM’s strength in China was instrumental last year in moving the company into a position where it came within 30,000 units of overtaking arch-rival Toyota, the world’s largest automaker.  GM also became the first automaker to sell more than 2 million vehicles in China during a single year, in 2010.

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VW Dominates Booming China. Challenges Loom

Is Chinese market finally cooling down? The Central Government has the power to stop the boom - and wants to.

by on Aug.04, 2010

Can Volkwagen continue to ride the tiger as China's best-selling automaker?

As one of the first foreign manufacturers to set up shop behind the old Bamboo Curtain, Volkswagen has been able to take advantage of the booming Chinese car market in a way that its competitors can only envy.

The German maker recently announced plans to add yet another Chinese assembly plant, hoping to keep up with demand that has strained its already significant capacity. (See VW Signs Contracts for another Chinese Plant -Another 300,000 vehicles annually from Eastern China.)

But despite its position as the country’s largest automaker, a senior VW official admits there are plenty of challenges ahead: from rising competition to the Chinese government’s own efforts to cool down an automotive market that has, at times grown by triple digits, threatening to overheat the economy.

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“The pace of growth has slowed down, largely because of government intervention,” says David Goggins, VW AG’s vice president of marketing and strategy in China, “but that makes sense.  It was running at unsustainable levels.”

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GM Launching New, Low-Cost Brand In China

No plans for U.S. distribution.

by on Jul.19, 2010

GM will partner with SAIC and Wuling on the new Chinese brand, Baojuan.

With Chinese booming auto market spreading across the country, General Motors has launched a new joint venture aimed at capitalizing on demand for smaller low-cost cars.

The new Baojun brand is a three-way joint venture established by GM and its partners SAIC and Wuling Motors.  They currently cooperate on the production of a low-priced microvan, but under Baojun will focus on small cars aimed at the next generation of Chinese buyers in the country’s second and third-tier cities.

The project, GM says, will exclusively target China, though some industry observers believe it could eventually provide a production base for GM to ship products to other emerging markets in Asia and other parts of the world.

“The introduction of Baojun is part of GM’s multi-brand strategy in China,” said Kevin Wale, the president of the fast-growing GM China Group. “Baojun will complement our other brands sold in China including our fastest-growing mainstream nameplate, Chevrolet. It will enable us to better address the increasingly segmented Chinese vehicle market.”

GM’s latest move reflects its increasing focus on China, which so far this year has been a larger market for the maker than the United States.  GM is locked in a pitched battle with the German Volkswagen AG for dominance in China, VW announcing expansion plans of its own just last week.

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China is currently the world’s largest national auto market, taking the lead from the troubled U.S. market last year.  While demand has been slowing, Chinese car sales have continued to grow at a double-digit rate so far this year.

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Shanghaied: At Least 13 Global Debuts Expected at Chinese Motor Show

Porsche sets stage with world debut of Panamera.

by on Apr.20, 2009

The unveiling of the production version of the long-awaited Porsche Panamera highlights the 2009 Shanghai Motor Show, though at least a dozen other local and foreign products will make their global debut, as well.

The unveiling of the production version of the long-awaited Porsche Panamera highlights the 2009 Shanghai Motor Show, though at least a dozen other local and foreign products will make their global debut, as well.

They say the global recession has finally hit China, but you’d be hard pressed to tell by the frenetic pace of Shanghai, host of this year’s Chinese motor show – and the backdrop for a flood of new vehicles, including the production version of the Porsche Panamera 4-door sports car.

Once little more than a regional outpost for marginal native nameplates.  The Shanghai Motor Show – which alternates every other year with Beijing – has become one of the most important events in the automotive world.  And it could become even more significant in the years to come, considering that as of January, China is on pace to surpass the U.S. as the world’s largest automotive market.

The Shanghai and Beijing shows, meanwhile, could soon eclipse the faltering Tokyo Motor Show, which organizers nearly cancelled for 2009 due to weak foreign participation.  With the Japanese market all but closed to imports, manufacturers would rather focus their recession-restricted budgets on markets where they might actually sell their products.  And China certainly qualifies.

In recent years, the Chinese government has steadily rolled back restrictions on the industry, and has taken numerous steps, at both the national and local level, to prop up automotive demand during the recession.  Beijing has, for example, enacted new tax cuts on fuel-efficient vehicles.  It’s also taking steps to boost sales in more poorer, more rural regions of the country.  All told, the various moves helped push demand, in March, to 1.1 million vehicles.  That was a 5 percent increase – and marked the third month in a row that sales exceeded those in the economically-depressed U.S.

Subscribe to TheDetroitBureau.comThe Shanghai Motor Show will play a critical role in building demand even further.  Close to 100 different manufacturers will display at the city’s sprawling convention facility, including scores of local marques, such as Roewe and Great Wall.  In recent years, Beijing has quietly been encouraging a shake-out among Chinese local makers, forcing the weaker among them to sell out or close all together.

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