GM plans to sell cars Made in China to US

[zenMachine]

A planning document given to lawmakers by General Motors reportedly shows that the Detroit-based automaker plans to ship 17,335 autos from China for sale in the U.S. in 2011. If GM succeeds in importing vehicles to the U.S. from China, it could be the first automaker to do so.

The document doesn't show which vehicle would be brought over from the land of the Great Wall (we'd take the Buick Regal, above), but it does provide GM's volume plans through 2014. By that time, GM plans to triple its China to U.S. exports to 51,546 units. While 51,546 sounds like a lot of cars, it only represents 1.6% of the planned 3.1 million (perhaps optimistic) sales the General is expecting five years from now.

Regardless of the quantity of vehicles coming in from China, union leaders are none too pleased with the development, says Automotive News. The 12-page document also showed increased production in Mexico, with annual units rising from 317,763 in 2010 to 501,316 in 2014. South Korea, which will likely make new vehicles like the Chevrolet Spark, will increase production from 36,967 in 2010 to 157,126 in 2014. In an open letter, UAW legislative director Alan Reuther has gone on record saying that GM "should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries."

While many would expect the U.S. to be the big loser here, virtually all of the related production loss occurs in Canada. According to the 12-page document, U.S. production would continue to represent two thirds of the overall sales volume for the next five years, while Canada is slated to lose 101,000 units.

Leaked GM document shows automaker plans to sell China-built cars to U.S. consumers

[FL_Prius_Driver]

Sounds like another GM decision based on today's financials only, not long term consequences.

[JSH]

Originally Posted by FL_Prius_Driver

Sounds like another GM decision based on today's financials only, not long term consequences.

Not at all. I only makes sense that GM would build some cars overseas and ship them to the US.

I suspect the Chinese models GM will import to the US will be Buicks. The Chinese love the Buick brand and Buick is by far GM's best selling brand in China. All of these Buicks are built in China for the Chinese market.

In the US, Buick is a niche player at best only selling a total of 137,000 cars in 2008. So it makes sense for GM to build all Buicks in China and ship a small number to the US.

http://www.autonews.com/article/2009...304279961/1131

[FL_Prius_Driver]

It makes financial sense, but not long term product sense. Time will tell. It is very clear to me that with only financially trained CEO running the shop, all previoius GM decisions were based on the next quarter targets, not the next decade. I see nothing to indicate any fundamental change.

[JSH]

Originally Posted by FL_Prius_Driver

It makes financial sense, but not long term product sense. Time will tell. It is very clear to me that with only financially trained CEO running the shop, all previoius GM decisions were based on the next quarter targets, not the next decade. I see nothing to indicate any fundamental change.

Why doesn't assembling a car model in the country where the majority of those vehicles are sold make product sense to you?

[FL_Prius_Driver]

Originally Posted by JSH

Why doesn't assembling a car model in the country where the majority of those vehicles are sold make product sense to you?

Yes it does...on the surface. It's what is going to happen under the surface that I am refering to.

GM is dying. Most all of the decline is due to bad strategic decisions over the past couple of decades. Every single one of the individual decisions made "sense" in the short term, but the long term effect was to reduce GM market share to less than half of its high.

This falls in the same category. The decision today is to start importing some vehicles from China. Is that going to increase GM's market share or help reduce it more? e.g. Would a slightly cheaper Buick revive the Buick name, or would it make the Buick a car to avoid?

[hill]

If it is Buick, it's the same land barge that doesn't sell here. I'd hope it was that new Chinese clone of the volt. Now THAT would be something! Well, Malorn hated it when Chinese (and Canadian & Mexican) parts became part & parcel with the GM brand ... he'll LOVE hearing about a 100% Chinese GM product. Maybe if there going to sell the Volt clone, Malorn WILL sell me one after all.

[JSH]

Originally Posted by FL_Prius_Driver

Yes it does...on the surface. It's what is going to happen under the surface that I am refering to.

GM is dying. Most all of the decline is due to bad strategic decisions over the past couple of decades. Every single one of the individual decisions made "sense" in the short term, but the long term effect was to reduce GM market share to less than half of its high.

This falls in the same category. The decision today is to start importing some vehicles from China. Is that going to increase GM's market share or help reduce it more? e.g. Would a slightly cheaper Buick revive the Buick name, or would it make the Buick a car to avoid?

Again why is it short-sighted to build a vehicle in China?

China is a huge auto market. It is currently the largest in the world due the the downturn in the US market. GM is a global company and builds and sells vehicle all around the world. GM is profitable and growing in China. (They increase sales in China 6% in 2008 selling 1.1 Million vehicles)

2008 sales: ---------------- Volume --- % Change
North America ------------ 3.5 M ---- (-21.1%)
Europe --------------------- 2.0 M ---- (-6.5 %)
Latin America / Africa ---- 1.3 M ---- (+3.2 %)
Asia ------------------------ 1.5 M ---- (+2.7 %)

Note that only 42% of GM's sales are in North America.

It is GM North America that is bankrupt. GM Asia Pacific, GM Latin America are making money. If "GM" declares bankruptcy in the US it will be GM North America that will enter bankruptcy not their international companies.

For GM to have a future they will need integrate and consolidate worldwide production. Vehicles will be built in their primary market. Since 65% of Buicks are sold in China I would expect than GM would build the majority of Buicks in China. If they want to fill a gap in their US model line they would be wise to build a few extras at their Chinese plant and ship them to the US.

You assume that a vehicle built in China will be an inferior product. Why? The computer I'm typing this on was built in China by Apple. China makes parts for Boeing Dreamliners. Toyota is now building the Prius in China. Quality depends on design and quality systems, not the nationality of the person that screws together the components. There is no reason to believe that a Chinese made GM car would be any better or worse than a American made GM car.

EDIT: The Chinese Buicks are pretty nice cars and far more modern than what GM sells under the Buick brand in the US. This is the 2009 Buick Regal sold in the Chinese market:



It is built on the Epsilon II platform that the 2009 Opel Insignia is built on. The Insignia was voted the 2009 European Car of the Year.

[Kapena Gary]

The steamship company I work for has gone from having our required shipyard periods, which used to be done in the USA, done in Korea, and then for the past 10 years in China. My ship just came back from a 60 day shipyard period in Dalian, China. The previous yard period, 5 years ago, was in Nantong.

Believe me, the quality of their work is in no way comparable to South Korea, Japan, or here. However, their prices can not be beat, not even close.

I have been through many shipyard periods and I have never seen poorer quality than in China. Their sole priority seems to be to get the ship in and out as quick as possible and to hell with the quality of the work.

Don't get me wrong, I work with agents and officials in China all the time and they are truly wonderful people. But, the culture (so far), doesn't seem to put as much importance on quality as Korea, Japan, or the USA. IMHO

I would hate to be the Captain of a ship just built in China. New ships are a pain in the butt, but one built in China would be even more so.

In my remaining lifetime I could never see buying a car built in China.

Please don't take this as any kind of an indictment against Chinese. I love the place and particularly the people I work with, especially Shanghai, and will be there again in June for a week or so.

[JSH]

It really depends on who is doing the work.

Companies that I have worked for source many components from China. What we have found is that the quality varies from abismally horrible to world class. The deciding factor is who you do business with. My former company did business with suppliers from around the world. Many of those US, European, Japanese, Korean companies also had factories in China. When parts came into our plants for receiving inspection our inspectors couldn't tell whether the parts came from China or Ohio without looking at the paperwork. The reason was because that gear supplier based in Ohio set up a plant in China with their technology and quality systems. The difference between the plant in China and the one in Ohio was the people working on the line.

On the other hand local Chinese suppliers were horrible back-alley type places. No heat, no lights, no quality system at all. With these suppliers the initial pieces were perfect but production parts were junk. We very quickly decided to only source Chinese parts from multinational companies that manufactured product in China.

If you are afraid of Chinese parts you will need to avoid flying:

"Today, more than 3,500 Boeing airplanes -- one third of Boeing's world fleet -- have major parts and assemblies built in China. Examples of major parts and assemblies built for Boeing by the Chinese industry include the 737 horizontal stabilizer from Shanghai Aircraft Corporation, 737 vertical fin from Xian Aircraft Corporation and 737 tail section modules from Shenyang Aircraft Corporation."

Boeing: Boeing 787 Highlights $600 Million in Contracts with Chinese Suppliers