GM Plans US Sales of Chinese-Built Cars

By Brendan Moore

05.13.2009

gm-logo-small1In a surprise move, GM is planning to import Chinese-made cars, beginning in 2011, according to Automotive News, an auto industry trade publication. The plan calls for 17,335 imports in 2011, jumping all the way up to 51,546 imports in 2014.

Apparently one of the documents meant for the federal government’s auto task force was leaked on Tuesday, and today the AP news service repeated assertions made in an article in The Shanghai Securities News that GM is planning to build cars in China like the Chevrolet Spark and then import those cars into the US as part of their plan to reduce manufacturing costs. GM currently manufactures cars in China, but all of that production has gone to Chinese customers in the past.

Let’s start with the obvious.

The UAW is going to work up quite a head of steam over this. They will point out the GM has over $15 billion dollars (USD) of taxpayer money and therefore shouldn’t be eliminating jobs in the United States. GM is also planning to import more vehicles from Korea and increase the volume of the ones coming from Mexico, in addition to the planned imports from China. These places are all outside the US (and also have lower labor costs than the US) and the UAW is going to be really unhappy if GM imports cars from any of these countries, much less all three.

The Treasury department, the Obama’s administration’s proxy in GM’s restructuring, wants GM to reduce their costs in order to be more profitable. They also want GM to manufacture small cars that use less fuel and put out fewer emissions.

However, they don’t want American jobs lost, either, and that desire directly contradicts with GM’s plans to bring in imported cars and sell those cars to Americans.

What to do, what to do, right?

Both the Treasury department and GM declined to comment today.

2009-chevrolet-spark-green

COPYRIGHT Autosavant – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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3 Comments

  1. Hey, I like the way that car looks but can’t see why we can’t make it here

  2. LOL. And the plot thickens… Just wow. But then again, what’s your stance on the UAW? I’m usually against them but man, talk about a royal screw job.

  3. It is well known that vehicles in the micro to mid size classes (which East & South Asia have a long history of manufacture) make very very little profit per car for the maker. So there are two options – sell at a premium (which is what many Euro makers often do) OR sell almost as a loss leader but make them cheaply and sell warehouseloads of them (which is what many mass market makers do).

    Which one would the US consumer most likely respond to? Premium or cheap? If the latter then GM and everyone else must do their utmost to make them as cheap as possible to build.

    Or they could do what the VW Group does. Sell premium versons as a VW and the cheaper versions as either Skoda or Seat. Holden did the same thing in Oz by selling premium Euro small car (Astra) and a cheaper Korean alternative (Koleos or some such)….wan’t very successful mind you!!

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