GM in China
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Code : COM0027
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Region : China
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The Chinese Market and the Competition In the 1990s, the Chinese passenger car market was highly regulated due to the government control over production volumes, prices and the models that could be manufactured and sold. The government wanted to reserve the mass market for the local players, and the foreign manufacturers were forced to manufacture vehicles that were too expensive for the average customer... GM's Joint Venture in China Leveraging on its extensive global resources to deliver the best combination of technology, customer care and innovation, GM entered China to manufacture automobiles, auto components, set up R&D centre, extend financial services and provide after sales services. To penetrate the Chinese market, GM entered into a number of joint ventures with domestic manufacturers. The company felt that the knowledge of the domestic industry as well as the distribution channels of the domestic partnerswould come handy for GM's operations... The Problems Even though GM had set a game plan of entering into a number of joint ventures in China to have a presence across all segments of the Chinese automotive industry, they still had to deal with a number of problems in China.One of the main problems was the poor performance of its joint venture with Jinbei. It was the sole unprofitable venture among all of the motors' joint ventures in China. In the first half of 2003, Jinbei GM recorded a loss of 32.7 million Yuan, or $3.9 million. It sold only 3,289 Blazers in 2003, which was about 10% of its capacity of 30,000 units a year... |
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