Gm in China

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Table of Content

Introduction3
1. Case Situation3
1.1 Situation of the Chinese Car Market in General3
1.2 Situation of GM China4
2. Defining the Problem5
2.1 Technology “Shakedown”5
2.2 Going down-market vs. Securing Quality-Image5
2.3 Problems in Home Market5
2.4 Increasing Competition5
2.5 Possible Take-Over of GM China by Chinese5
3. Problem Causes6
3.1 Technology “Shakedown”6
3.2 Going down-market vs. Securing Quality-Image6
3.3 Problems in Home Market6
3.4 Increasing Competition6
3.5 Possible Take-Over of GM China by Chinese6
4. Alternative Solutions7
4.1 Product Solutions7
4.2 Partnership-Commitment Solutions7
4.3 Sales Structure, Marketing and Service Range Solutions8 4.4 China-Sourcing Solution8
5. Decisions9
5.1 Product Portfolio Changes, Market reach (from Tier 1 to Tier 2 & 3)9 5.2 Intensifying or Changing Partnerships (GM-China: Wuling-SAIC)9 5.3 Changes of Sales Structure, Marketing and Service Range10 5.4 Value Chain Changes and China-Sourcing11

6. Taking Actions12
6.1 GM Chinas future vision12
6.2 Goals12
6.2.1 Strategic goals12
6.2.2 Operational goals12
6.3 Measures13
6.3.1 Product Portfolio13
6.3.2 Product Distribution and Marketing13
6.3.3 Controlling13
Summary14
Literature15


Introduction

General Motors China Group (GM China) is a fully owned venture by General Motors (GM). The roots of GM in China trace back to the year 1929, where it sets up its first dealership in Shanghai. GM China has eleven joint ventures in China, two wholly owned foreign enterprises and more than 35,000 employees. GM China and its joint venture partners offer the broadest lineup of vehicles and brands among car manufacturers in China, offering passenger vehicles and commercial cars under seven different brands. In 2011 it sold more than 2,5 million vehicles in China, is has been the sales leader among multinational car manufacturers for seven consecutive years. Driven by rising competition from other western car manufactures and growing pressure of local automakers, GM China faced a threat to launch a car targeting the Chinese middle class price conscious costumers, who live in the tier 2 & 3 cities. This car was launched in 2011 by GM China, it’s Baojun 630 to compete with other local Chinese brands. American cars have a repetition to be of superior quality. Fear exists, that the image could suffer by the introduction of the Baojun 630. Furthermore the Chinese government aimed the development of China-owned cars and pushed foreign automakers to transfer their technology, especially in the field of electric and hybrid cars. Companies who restrict would be banned from the Chinese market. This paper’s objective is to describe the current situation of the Chinese automobile market and the specific situation of GM China. Based on the paper “General Motors in China: Coping with the Changes in the Automobile Industry” (ICMR, 2012) and further online resources, it describes the most important problems of the company and offers some explanations and possible causes. Further it describes alternative solutions and finally presents a concrete decision and action plan proposition, aiming at solving the described problems. 1. Case Situation

1.1Situation of the Chinese Car Market in General
ChancesRisks
Largest market in automobile unit sales and production
Large number of highly trained workforce
Significant share of global salesRising wages for skilled labor •Inadequate patent policy and poor supervision of counterfeit goods •Lack of process knowledge base
Stricter requirements for JV-cooperation
The Chinese private car market is the largest market in by automobile unit production since 2008. In 2011 the total number of Chinese auto sales exceeded 18,505,100 units, of which 71 percent were international brands, 29 percent were locals. Sales forecasts expect the Chinese market to grow by 8.3 to 17.9 percent annually (GTAI, 2012)....
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