GM forecasts 20+ percent growth in China, but Chinese competition lies ahead
General Motors is revising its sales forecast for China this year - upward. Thanks to a booming economy, GM China Group president Kevin Wale projects sales growth "significantly more" than GM's earlier forecast of 20 percent. GM is the market leader in China, with a 12 percent share.Wales sees strong growth in the Chinese market through 2015. Despite the expanding market, profits are being held down by manufacturing overcapacity and intense competition - two factors which are predicted to drive Chinese manufacturers into overseas markets.
Years of manufacturing joint ventures with companies like GM, Ford and Volkswagen have given Chinese companies the skills and technologies to launch their own brands, targeted at a global market. A DaimlerChrysler executive told Reuters that he sees Chinese cars entering the U.S. market in three to five years, and appearing in global markets in five to eight years.
Time will tell whether established automakers have taken short-term gains at the expense of future competition in their home markets. Certainly some Chinese auto industry insiders think their industry faces an uphill struggle to develop their own exportable products - check out this BusinessWeek interview for some food for thought.
[Source: Reuters]
Reader Comments (Page 1 of 1)
Lithous 8:43PM (6/21/2006)
"Years of manufacturing joint ventures with companies like GM, Ford and Volkswagen have given Chinese companies the skills and technologies to launch their own brands, targeted at a global market."
You meant "forced joint ventures". And what about America's sweetheart? I'm sure they are the only ones who could give the Chinese companies "skills", right?
"A DaimlerChrysler executive told Reuters that he sees Chinese cars entering the U.S. market in three to five years, and appearing in global markets in five to eight years."
Great. We get the crappy cars first. How nice of them. I wonder if a self destruct mechanism will be built in so the Communist can kill all the Americans once Chinese made cars are our only choice like it is right now for DVD players.
But my stance is still as it was... U.S. test scores are down and GM sales are down in the U.S. Chinese test scores are up and GM's sales there are up. I guess the smarter people are buying GM. Nice. [/sarcasm] OK, come on out all you Terrell Owens'.
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Wolf 9:05PM (6/21/2006)
China alredy makes enough stuff for GM that they could probably just build a cheaper bootleg car instead.
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Rob Lowe 9:27PM (6/21/2006)
I was just in China earlier this year. And talking brand dilution. GM puts the Buick name on any piece of 10 year old technology it can find or build. As soon as China realizes that MacDonalds, TGIF restaurants and GM are anything but premium brands, you can pull the plug on that market. And as always the mis-management is self inflicted.
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matt 10:07PM (6/21/2006)
Terrell Owens is an example of a self important, selfish, over paid union worker who screws over his employer and is a cancer to his team. But he's certainly not the first.
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Lithous 10:32PM (6/21/2006)
"Terrell Owens is an example of a self important, selfish, over paid union worker who screws over his employer and is a cancer to his team. But he's certainly not the first."
Of course, Terrell, it is those bad union workers. Yeah, most Americans don't have it easy in their jobs, oh no, not at all. Yeah, the rest of the world makes as much for doing as little in any given job as ANY NON-UNION member don't they?
The main question is, how fast could I surf the Internet and find a replacement for your job and how much less could I pay that person. If I could find someone 1 ounce better and 1 cent cheaper (which I'm guessing I could) then I could easily delcare you a cancer on your company, now couldn't I?
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matt 10:47PM (6/21/2006)
You couldnt exactly outsource my job. I helped develop an agricultural product in school which I built into a business and then sold. But even if you could, the reason T.O is a cancer isnt because he's expensive, it's because he's an ass. Regardless of how much he makes he demands more and more. He has no regard of the sucess of his team, only himself. Remind you of any other union members?
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Lithous 10:48PM (6/21/2006)
"GM puts the Buick name on any piece of 10 year old technology it can find or build."
If anything in China was even close to current "technology" it would be sold here. Bottom line is no company over there (and they're all over there) makes an ultra modern car.
"As soon as China realizes that MacDonalds, TGIF restaurants and GM are anything but premium brands, you can pull the plug on that market."
We'll just have to test one of those Buick driving Chinese people and you and see who "realizes" things better? We'll do some math and engineering and see what they "realize" and what you "realize".
"And as always the mis-management is self inflicted."
I'll have to give you that one. GM is the only mis-managed company in America. Darn, you "realize" so much.
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Lithous 10:57PM (6/21/2006)
"You couldnt exactly outsource my job. I helped develop an agricultural product in school which I built into a business and then sold."
I'm with you. You couldn't hack building a business like Walton or Gates (i.e. there is always more to accomplish), no, you had to sell out because it is too difficult to compete very long and keep up. I understand exactly what you are stating. Makes sense Terrell. You expect GM to compete as #1 for more than 75 years or they are a POS but you stayed in your game for all of what, 7 months, 7 years? Anyway, GM has all kinds of innovations in it's history, I guess should just sell out sense they can't compete, it worked for you.
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matt 11:10PM (6/21/2006)
Why do you keep calling me Terrell? Do I come off as a union worker who cares nothing about the organization I work for? Yes I sold my business but it isnt for any reasons you would understand. I can do anything I want because I work hard and have marketable skills. I wanted to go back to school and study medical physics so that's what I chose. Please dont cry about it. I really didnt mean to hurt your feelings. Okay T.O?
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Lithous 11:42PM (6/21/2006)
"Do I come off as a union worker who cares nothing about the organization I work for?"
No, just a person who started a business you cared nothing about, enough to sell it.
"I can do anything I want because I work hard and have marketable skills."
In your opinion or did God tell you this? I mean, how do we know this to be a fact? The part that you work hard and have marketable skills.
"I wanted to go back to school and study medical physics so that's what I chose."
Sam Walton would have studied medical physics, grew his company to billions in sales and chewed gum at the same time. So, yeah, I don't understand the reason, like you stated.
"Please dont cry about it. I really didnt mean to hurt your feelings. Okay T.O?"
Ah, I see your marketable skill, do onto others as they do to you (but with a twist). I call you Terrell and you call me T.O. Brilliant. I like it. Let's franchise it.
You sound like a regular Marc Andreessen the way you made it. Was your agricultural company the fastest growing company in the history of the world? Just out of curiosity.
Nice that you were a co-developer of this agricultural product. My guess is you did 90% of the work though. Good stuff.
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matt 12:09AM (6/22/2006)
"No, just a person who started a business you cared nothing about, enough to sell it."
I didnt care about running a business, only the product that I developed. The product was the business and the product was complete.
"In your opinion or did God tell you this? I mean, how do we know this to be a fact? The part that you work hard and have marketable skills."
This is the internet, for all you know Im Rick Wagoner and just messing with you. But the truth is I dont demand a company pay me 70k a year to do a job that anybody with all their limbs could do. Like I said, you really couldnt outsource my job.
"Sam Walton would have studied medical physics, grew his company to billions in sales and chewed gum at the same time. So, yeah, I don't understand the reason, like you stated."
Why compare me to Sam Walton? Is everyone else in the world unsucessful because they arent as wealthy as Sam Walton was? I have no desire to run a business. If I did, he probably would have crushed it. Does that make me a failure? No. And does that mean he would have been good at physics? Who knows. But Sam Walton also didnt let his employees squeeze his company for 70k wages to stock the shelves of his store.
"You sound like a regular Marc Andreessen the way you made it. Was your agricultural company the fastest growing company in the history of the world? Just out of curiosity"
It was sucessful enough that I can live comfortably without screaming at how unfair life is.
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Lithous 12:54AM (6/22/2006)
"Why compare me to Sam Walton? Is everyone else in the world unsucessful because they arent as wealthy as Sam Walton was?"
Is every car that isn't the best in a segment a POS? I don't know. I'm using autoblog import fanboy logic. GM is the worst company in the world because it isn't Toyota right now. That is the logic I see on here so I thought I'd try it out. It makes perfect sense as you pointed out.
Well I'm glad to see you developed something so great the world could not live without it. More power to you. But I'm not sure about the 70K for a job anyone with limbs could do. All the people I work with have to have their water cooler moments at least 10 times a day and come in whenever traffic allows. That wouldn't fly on an assembly line. As another example, how many real estate agents who were lucky enough to live and work in this great country and have (below) average sales skills and work a few hours a day and made a lot of money have the discipline to work on an assembly line? Probably none. So your comment about any capable person could do union work isn't exactly correct. Plus the workers you are refering to negativley (like Terrell Owens would) are compared to the best in the world everyday with their work. MOST Americans don't have that situation. Most Americans provide some local service and don't understand anything about the auto industry.
Personally I've never been a member of any union but one thing is for certain, if it wasn't for the UAW cars (that are sold here) would be made in China already, I mean most of them. I can see 90% of all other U.S. manufacturing companies who either went to Chinese manufacturing when profits weren't great and/or followed there because the next guy went there. The UAW, meeting their own concerns keeps that from happening. So if GM had the idea that they need to do that like Motorola (all Chinese and Taiwanese stuff now, StarTac and previous phones were made here) did and the UAW didn't stop them then monkey see, monkey do, all car companies would NEED to build their American sales cars there to compete. That is how it works.
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Lithous 1:01AM (6/22/2006)
To clarify...
"if it wasn't for the UAW cars (that are sold here) would be made in China already, I mean most of them."
I meant to state that if it wasn't for the UAW, most cars sold in America would probably be made in China already.
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matt 1:48AM (6/22/2006)
"Is every car that isn't the best in a segment a POS? I don't know. I'm using autoblog import fanboy logic. GM is the worst company in the world because it isn't Toyota right now. That is the logic I see on here so I thought I'd try it out. It makes perfect sense as you pointed out."
A car doesnt have to be a segment leader to be good and I never said that. You've made the assumption that everyone that criticises GM at autoblog thinks Toyota's bring endless orgasms and GM cant get anything right. I dont think every car they make is a POS. I dont think GM is the worst company in the world. But they are a terrible company. A terrible company that is trying to improve. I hope they are successful but Im not going to pretend they are great when they arent.
"Well I'm glad to see you developed something so great the world could not live without it."
Again, I didnt say that. But I did develop something of value that most people could not do.
"But I'm not sure about the 70K for a job anyone with limbs could do. All the people I work with have to have their water cooler moments at least 10 times a day and come in whenever traffic allows."
Im not saying they dont work hard or that their jobs arent difficult or that they arent doing a good job. What Im saying is that 70k for a worker that doesnt provide a rarer skill than simply labor and hard work is unreasonable. They got to these, in my opinion, unreasonable wages by having the UAW squeeze every last dime out of the automakers to the point where it becomes difficult to compete. If their demands arent met, they threaten to walk (as Terrell Owens did). I am not anti union, as unions have done a lot for workers in this country. But I am against unions that take no regard for the sucess of the companies they work for. It's hard to be sympathetic to a group that I and many others see as part of the problem.
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GhostDoggy 9:12AM (6/22/2006)
How fuel efficient and emission friendly are the GM products being pimped in China?
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Richard Warren 11:05AM (6/22/2006)
Guys---Matt, OK, heres' the deal, you have limbs? Yes? Then take a little vacation, get a job assembling in an auto plant, get back to us. OK.
A job pays what it pays, union, non union, get over it, right now China happens to be just about the only country that does not have union workers. I happen to think that a computer "tech" plugging in replacement parts with plug and play and on screen guided instructions is overpaid at 60 per hour, but hey, that's what the job pays and when that sewer backs up that 75 per hour the the plumber gets seems like a bargin, even though it's something most of us could handle.
Each job has it's own merit and the least we could do is offer some respect for the person doing the job, union or non-union.
You also don't start a company, just to sell it off, you start and run a company yourself because you love what you do and you stay in it because you do love it.
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matt 1:03PM (6/22/2006)
Richard, the reason I would say an auto worker is over paid is because there is a large number of people who can do the job in America and would be willing to do the job for less than what the workers are currently being paid. I didnt say it wasnt a demanding job. But you dont get paid simply for effort. You get paid for how rare your skillset is. If there were 10 million people who could do what plumbers do in America they wouldnt be making the 75 per hour. The autoworkers arent the only problem facing GM and Ford but they are part of the problem. They squeezed too hard.
As for the company, Im not a business person. I dont love running businesses. We started the company because of the product we developed. It was out of necessity, not love. When we were nearly finished development, we sold. That allowed each of us to persue the things that we do love. For me, that was going back to school and continuing research in a new field that I had been interested in. Not business.
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Richard Warren 9:42PM (6/22/2006)
"Richard, the reason I would say an auto worker is over paid is because there is a large number of people who can do the job in America and would be willing to do the job for less than what the workers are currently being paid."
Who? You are aware that the non union workers (I might point out that in other countries one again they are union, but no here) make virtually the same basic hourly? The big difference is in legacy costs for the newcomers because they don't have the health or pention load of 100 year plus companies.
As to this comment "But you dont get paid simply for effort" no I guess you're right today it was announced that CEO's make on average 260 times what the hourly worker makes and it's going up, this year marks the largest compensation and the worst operating profits. No you don't get paid for your efforts anymore or the job you do but sure can get paid to be a failure.
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