GM Found a Strong Market for Buick in China
by: zekegervis
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Word Count: 606
2006 was a great year for
Buick, the brand that boasts of golf celebrity Tiger Woods as its chief
spokesman has been able to sell more cars in China
as compared to United States.
And now that the Buick has become one of China’s
top-selling car brands it is likely that the gap will further widen according
to General Motors CEO Rick Wagoner in a statement he made last month in Shanghai.
Buick, a division of General
Motors the renowned producer of quality Buick oxygen
sensor has trimmed down the brand’s lineup to
three vehicles for its US
market while sells eight models in China and plans to create
additional models for the growing Chinese middle class, which GM executives and
analysts refer to as “aspirational” car buyers.
Joseph Liu, GM China Executive
Director of Vehicle Sales, Service, and Marketing said, "The vision in China
for Buick is the premium, yet attainable brand for the upper-middle-class
customer. Buick is for China's
new generation of elites in pursuit of success, who want grand, elegant,
contemporary design."
The sales of Buick in China
are considered promising and profitable---a great market for General Motors,
which is still working to return its North American auto operations to
profitability. For the first three months of this year, GM’s North American
operations have lost $85 million but luckily the $127 million profit gained in China
has helped the automaker to boost the overall profitability of the company
obtaining a $62 million profit for the quarter.
The Buick brand in China
has played a key role especially in reaching the 303,150 units sold last year
from 110,763 four years ago. The growth of the Buick brand in China is part of GM’s overall
expansion in one of the world’s fastest-growing market. On the other hand, the US
sales of Buick continue to shrink from 432,017 four year ago down to 240,657
last year.
The future of the Buick brand
in China
is at present bright and will continue to do so for years to come. Buick is
also planning to increase its lineup not just at the current upper middle class,
which according to research journal McKinsey Quarterly estimates at about 10
percent or 130 million of China’s
1.3 billion people, but also for the 520 million up-and-comers that McKinsey
expects that would comprise the middle class by 2025.
The lineup of the Buick brand
for China includes
hatchback, sedan, and wagon versions of the Excelle, the Regal, and LaCrosse
mid-size sedans; two minivans; and the new Park Avenue
sedan, which was launched earlier this year and defines as mid-luxury.
In addition, GM China is also
working on a hybrid Buick sedan design for the China market. And although GM is
expanding its Buick lineup in China
it has no plans or whatsoever of doing the same thing for its US market. The fine interiors as
well as the appealing designs of the Buick are factors that might have
captivate the Chinese middle class.
Wagoner said, "Because
we're developing and growing in China,
we need a broader product portfolio to support it. Some of those products can
be used in the U.S.
I don't necessarily mean imported, but once they're designed and developed, if
all you have to do is tool it up to build it in the U.S. or Canada, that's a
much lower cost proposition. So I think a stronger Buick here actually helps
the Buick brand in the U.S."
About the Author
Zeke Gervis has a degree in Human Resource Management. He is an F1 fanatic and is a collector of racing memorabilias. At present, he enjoys working at a consulting firm in Iowa.
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