PRLog (Press Release) – Apr 07, 2011 – SHANGHAI -- With the CHEVROLET Malibu sedan and Captiva SUV slated to debut at the Shanghai auto show, GENERAL MOTORS has made it clear that it wants to move the brand upscale in China. It's a timely strategy, since the brand is losing steam. After surging 66 percent in 2010, Chevy sales in March rose only 7 percent year-on-year. By contrast, Buick an bmw M5 specification d Cadillac sales continue to soar. But it won't be so easy for Chevrolet to move upscale. GM will have to make a serious -- and costly -- investment to expand production capacity. Chevy's Chinese model lineup -- Spark, New Sail, Lova, Aveo, Epica and Cruze -- are mostly low-priced. The Spark costs only 43,000 yuan ($6,500), while the New Sail is priced at 60,000 yuan. As a result, Chinese consumers see Chevy as a discount brand. So it makes sense for GM to introduce the Malibu and the Captiva in China, which would move Chevrolet into higher price segments. But GM will have to invest a lot of time and energy to market these two new models. A mainstream model in the United States, Malibu is virtually unknown to Chinese consumers. Moreover, the Malibu and Captiva have formidable rivals. In the mid-sized sedan segment, competitors include the Toyota Crown and Camry, the Honda Accord and the Volkswagen Passat. The Captiva's rivals include popular SUVs such as the Honda CR-V, Toyota RAV4 and Toyota Highlander. To compete against these formidable rivals, GM will have to produce the Malibu and Captiva in China. Given China's high tariffs, it simply doesn't make sense to import these vehicles. I wouldn't be surprised if GM makes some announcements about future production plans during the Shanghai auto show.
SAIC buys $4.4B in parts, EV units from parent
SAIC Motor Corp. agreed to buy auto parts and electric vehicle businesses from its parent for 28.6 billion yuan ($4.4 billion) to extend its lead as China's largest automaker. SA mustang car IC Motor, of Shanghai, a partner of Volkswagen AG and General Motors, will issue 1.7 billion shares at 16.5 yuan each in payment for the assets, SAIC said in a statement. The purchases will boost the company's electric vehicle business, consolidate its supply chain and develop its serv 2011 Chrysler 200 Convertible ices and export operations, SAIC Motor said. The unit of state-owned Shanghai Automotive Industry Corp. is expanding as vehicle sales jumped 32 percent last year in China, the world's biggest auto market. Net income more than doubled to 13.7 billion yuan last year from 6.6 billion yuan in 2009, and sales rose 32 percent to 3.6 million vehicles. SAIC predicted its deliveries will rise 12 percent to exceed 4 million units this year. After the share sale, Shanghai Automotive's stake in SAIC Motor will rise to 77 percent, from almost 73 percent now, according to the statement. The SAIC Motor purchases include 6 android application 0 percent of Huayu Automotive Systems Co., a listed auto parts-making unit of Shanghai Automotive, and the 6 percent stake in GM Korea Co. that's owned by the parent company. SAIC Motor last bought vehicle-making assets from Shanghai Automotive in 2006 as part of a wider transfer of businesses from Chinese state-controlled companies to listed units. Huayu also bought car-parts operations from the parent in 2008.
Source: Auto News China/Bloomberg
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