General Motors China Case Study

General Motors and China’s SUV market

Performance:

China is the world’s largest market for the automobile industry and also the largest market for the US leader General Motors. GM is second only to the German Volkswagen in China in terms of sales volume. Thus, the stakes are high but growth is slowing down as the Chinese economy is growing at its slowest pace in two decades.

General Motors offers various brands in China including Chevrolet, Buick, Cadillac, Baojun, Wuling etc. Together with its partners, the company has sold a record 2,197,192 vehicles in China during the first eight months of this year. That was 2.3 % higher than the same period last year. This year, the three brands that have helped GM to stay afloat are Buick, Cadillac and

For example, the new SUV, Buick Envision 20T was launched in April and has been a big hit for GM in China. GM reports that Buick has had its best sales ever in China in the first eight months of the year. The brand’s sales increased 5.4 % year on year to 581,544 units. Envision’s contribution to the brand was not huge (57,000 units in the first half) but it is growing now. The increasing share of Buick Envision in the brand’s total sales is also financially beneficial for the company. The Envision is priced in the range of RMB 269,900 (about $43,450) to RMB 340,000 (about $54,700). The new SUV is a quality product that GM finds fit to export to US in near

It has been on the market for last six weeks and has performed well all this while. Affordability is a great volume driver especially in emerging markets like China, India etc. After all, the local Chinese players are thriving on the Chinese middle class population which has still got a lot of potential in it even after suffering the stock market rout for a few months now. The local SUV builders have in fact gained some market share on the back of their low cost, low price strategy. Riding the success of its first SUV, Baojun brand sales jumped 282.5 % to 223,367 units, an all-time high from January to August.

Strong demand for several SUV and MPV models offered by GM helped the company resist the market slowdown in August. The Buick Envision and Baojun 560 were the growth leaders for GM in the SUV space during the month, rising 161.7 %, while sales of the Baojun 730 MPV more than doubled. As a whole, Buick’s trio of SUVs that includes Envision, Enclave and Encore continued to impress this year. Together, these three together doubled in sales through the first half of the