TOKYO –Corp. plans to aggressively add capacity in China, the world’s hottest automotive market, GM’s top executive says.
|GM CEO Rick Wagoner says the auto maker is trying to add share in China.|
“We’re trying to add share in China, but I’m not sure we can add capacity quickly to achieve that,” GM Chairman and CEO Rick Wagoner says here during a media briefing prior to the opening of the Tokyo auto show.
“So I would say we’re going to scheme every way we can to do this the most quickly and most efficiently,” says Wagoner. “Going forward, it can include buying something existing, taking advantage of plants that somebody wants to get out of and building our own. So we’re going to keep leaning forward with capacity. If there’s a place in the world where you want to try to push capacity hard right now, it’s China.”
Auto sales in China have been booming, with deliveries projected to top 4 million units in 2003, compared with fewer than 2 million in 1999, according to Phil Murtaugh, chairman and CEO-GM China. Optimistic forecasts call for China to surpass the U.S. as the world’s largest automotive market by 2020.
GM re-entered the Chinese market with the Buick brand in the late 1990s, followed by the Chevy Blazer SUV. GM’s sales have grown quickly in China from just over 50,000 units in 2001 to more than 250,000 in 2002. Its market share is 8.2%, second among foreign auto makers.
GM now has plans to add more Chevrolet products to its lineup, as well as Cadillacs.
Wagoner notes GM constantly has been addressing its capacity situation in China, where the auto maker operates plants in Shanghai, Shenyang, Liuzhou and Yantai. Combined annual capacity totals 530,000 units.
“We’re adding brick and mortar there at (Shanghai),” Wagoner says. “We’ve bought controlling ownership with (China-based partner Shanghai Automotive Industry Corp.) in (Liuzhou).”
Part of the capacity solution is making better use of the Shenyang factory, which makes the Blazer. Sales have missed expectations and capacity is available. “We’re working on it,” says GM Chief Financial Officer John Devine. “But nothing to announce yet. There is some work to be done.”
Wagoner admits the Shenyang venture has been a rare disappointment for GM China, and hints a product changeover may be in the works. “We’ve got to get the right product in there. The truck and SUV market has been more dominated by the (domestic manufacturers’) lower price points. And we haven’t got the right formula.
“I think we’ve been very clear to say we’ve had some tremendous successes in China,” says Wagoner. “But we haven’t batted 1.000. And that’d be the one we haven’t hit very well. We’re considering a bunch of ideas. But nothing is finalized.”