Building the World’s Biggest Car Market
Bob Lutz in Chevrolet Aveo at Shanghai
By Bob Lutz
GM Vice Chairman
I finally have a chance to offer some quick thoughts on my trip to China last week for the Shanghai Motor Show.
In two words: very impressive … The Shanghai show is rapidly turning into an absolutely world class event, with most of the world’s automakers taking part. There’s no longer anything about the show that has the slightest smattering of less than first-class production, especially in terms of the elegance of the stands, and the elegance of the facility that houses the show. It’s all at least as impressive as many of the international shows on the circuit. It has a lot of space, and big stands for the automakers, and it’s just a great show.
What’s particularly impressive is the rapid process made by the Chinese producers who are not affiliated with anyone. They’re developing their independent capabilities and they’re coming on very fast. So is the whole of China, for that matter.
When you look at the country, anybody who says the future of China is overblown or over-hyped just doesn’t get it. If anything, it’s under-hyped. We have no conception of what that place is going to be like in 10 years, and beyond. Shanghai and its surrounding province alone will have hundreds of millions of people with enough income to buy cars. And that’s just one part of China.
They’re in the process of building 50,000 miles of interstate freeways, north-south and east-west routes, and it’s likely that cities will spring up at the nodal points where the highways meet, as the nation shifts from largely agrarian to largely industrial. Picture America’s Industrial Revolution replicated on a scale of a billion and a half people. In 10 years, China will be, by far, the world’s largest automobile market. Ignore it at your peril.
A Chinese dance troupe and the Chevrolet Aveo
GM is positioning itself to capitalize on the market’s growth. At the Shanghai show, we introduced the new Chevrolet Aveo (see Detroit News story), which I think will do exceptionally well. It’s a nice little notchback sedan with a beautiful interior, and I think the Chinese market will embrace it. Eventually, this new Aveo will be sold in 120 countries and territories around the world.
I also took the opportunity to visit and get progress reports at our vehicle development centers both in Shanghai, the Pan Asia Technical Automotive Center (PATAC), and in South Korea at GM Daewoo Auto and Technology (GMDAT). I must say I came away incredibly encouraged by the great work being done at these facilities, and by our prospects for success in Asia and beyond. I saw some staggeringly great future designs with truly international potential that I hope we can share with you someday soon.
If any readers in Asia could weigh in with thoughts on these and other subjects, we’d be interested to hear from you. In the meantime, have a great weekend.
P.S. And oh by the way, here’s some interesting reading.
60 Comments
Leave a Reply
(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)
Hooray for china…Now where’s our “HOT” products, that we can look forward to being on a waiting list for?
OOOH! THAT IS SO GREAT THAT YOU ARE DOING BUSINESS WITH __COMMUNIST__ CHINA!!!
Mr. Lutz Goes to China
GM FastLane Blog: Building the World’s Biggest Car Market. Bob Lutz has returned from the Shanghai Auto Show convinced that GM is poised to reap the benefits of an expanding car-market.
Bob’s Having Chinese Tonight
Well, Bob Lutz just got back from the Shanghai Auto Show and took a minute to write about what he saw.
Interesting read. It is a “Global” world we live in these days. A GM success in China is a very good thing for us at home. Glad to hear GM is positioning for that success. I guess some people can’t see the forrest for the trees.
That’s great, I hope you take China by storm… just don’t take us Americans for granted.
Bob, let’s get real here. The G6 might be an improvement on the Grand Am, but it is far from solid. You want to see a solid car? Look over in the Chevrolet showroom next door and check out the Malibu. If one’s in your area, also look at 9-3 at the SAAB dealership. The SAAB is exceptional, the Malibu above average, and the G6 is subpar in comparison. Yes, we get it, it’s better than the Grand Am, but the competition is much better still. I think your credibility would be a lot higher if you stopped trying to defend inferior product by blaming everyone but GM for the negative press. Do the Malibu and 9-3 get such terrible reviews? No. Quit passing the buck, Bob. I’m going to quote an excerpt from the “interesting reading” above:
“It’s not an Accord or a Camry, nor is it meant to be.”
Is that what GM really thinks? I see these G6 commercials comparing the G6 to Camry and Accord nearly every day. Pontiac.com seems to like those two vehicles in its online comparisons. Is this the new GM practice? That when a vehicle is uncompetitive with the competition, to simply explain away that “this vehicle isn’t supposed to compete with ___.”? But those Camry/Accord/G6 commercials are still running.
Consumers are going to compare these two vehicles because they are in similar size and price classes. Your 7 January 2005 blog entry “On Design Interiors” even compares the G6 to the Accord, but claims that the G6 is really competitive because even though the Accord has a much more impressive interior, the G6 is substantially cheaper. Well with up to $5k in rebates this could very well be the case. The base V6 Honda Accord sedan can be had for slightly under 24k. The base G6 prices slightly more than 21.5k. The price difference between the two is less than 2.5k. Unfortunately, the base 4-cylinder Accord has a better interior at under 17k than the LOADED G6 does at 26.5k. This is unacceptable.
Also in the “On Design Interiors” entry, you state, “But give us credit for a vast, vast improvement over previous Pontiac interiors.” Sorry, Bob, it doesn’t work that way. A vehicle is not a good vehicle if it is merely better than the one it replaces. After 5 years of the last Grand Am once would hope GM had made some substantial improvements. GM, like every other automaker out there, will be judged by how a model stacks up against the competition. GM will get credit when credit is due, like it largely has with the new Cobalt. The Cobalt is not just substantially improved compared to the archaic Cavalier, it is a serious class contender. The only vehicle that might keep it from being the class leader is the Mazda Mazda3.
Another example: Cadillac. SRX just won the Edmunds Inside Line comparison test of luxury V8 SUVs. That’s credit where credit is due; the SRX is a very solid vehicle. The only other model that comes close is the Volvo XC90, and if the SRX had a higher-quality interior (center stack mainly) there would be no contest.
It’s easy to feel compelled to play the blame game; this is America, no? Thing is, unless GM wants to shed brands like a VW sheds parts, GM needs to take responsibility and a) build cars people actually want to buy, and b) build these cars with high quality of materials and attention to detail. A consumer should buy a car and be impressed with the little touches. If a consumer can sit in a car and say “Oh, this is where they cut corners,” then you’ve missed the mark. I want GM to succeed, but you guys in Detroit need to take off the rose-colored glasses and touch, sniff, feel, and think in the realm of reality.
Interesting report from China. The world sure is soon to tilt their way. Also the Canadian review added to my appreciation of the G6. It seems to be an acceptable alternative to the competition and it may blossom in a year or two.
Too Bad it isn’t ready NOW for prime time. But you’re getting there!
Cheers
Bill
middle age hotrodder, been driving GM since the 60’s like the new days but i write the checks & pay the bills,and GM is gettin farther and farther away from my pocket.give me a 3/4 scale camaro with a 1.8L V-8,a 6 speed, a bottom end and drive-train that’ll take 9 grand and nitrous, but get 30mpg bone stock and be insurance-friendly. are ya thinkin yet? please wake up!
Hi Bob,
One thing I think you allude to but don’t actually mention in China’s rapid expansion of their transportation system is since they are starting at near ground zero, China probably more than any other country in the world is in position to redefine the automobile. The problem with North America is our highway system is way to big and complicated and would cost way to much to use anything else other than the good ole gasoline powered internal combustion engine. China could build fuel cell filling stations as part of their infrastructure and lead the world out of its dependency on dinosaurs. GM would do well to continue their research on fuel cell powered vehicles and introduce them to the Chinese market (lots of “what ifs” though). Then as volumes bring costs down, migrate that technology to the American Market. Lots of things can happen as China develops but the country is so big, they can lead the world into new modes of transport.
Thanks for letting me and others express our views.
Just keep your ear to the ground Lutz see what China is asking for and deliver double, but stay true to who you are. Send fuel efficient hybrids as oil production will not grow as fast as the Chinese car market. But don’t leave open any segments of the market, in short, keep Buick a Buick and Cadillac a Cadillac.
Competition is getting fierce everywhere and you need to respond to every significant challenge in the market by the next year’s autoshow. If the Toyota Prius is a hit respond with your own Prius. If their Sienna is a hit repond to it. You are leaving too many unanswered product categories.
Send a team of 20 engineers to a rented office with $10 million dollars and let them respond to one of the top ten automotive challenges facing GM today with a concept that can be put into production with existing parts.
Just like you did with the Solstice, let the engineers come up with a Sienna fighter ASAP. You can do this for the top ten biggest challenges facing GM. Cars like the Sienna, Accord, Camry, Acura TL and Nissan Morano for example.
I think if each of GM’s automobile projects starts small, efficient and nimble with minimal capital risk then guage the consumer response, it would be better than to start big and let it get bigger to set it up for too much capital, scrutiny and risk and possible failure.
Once the project proves successful then expand the product range to include other brands. The Solstice is the shining example. I think if you did the Monte Carlo project the same way you would have gotten a better result.
I understand that totally new minivans may be coming at the end of the decade on the GMC Graphite platform for example. Is it toally foolish to take 30 engineers, lock them in a corner room and have them develop a Sienna fighter by January’s Detroit autoshow?
Is it totally out of the question to have 30 engineers lock themselves in a room and come out with a Camry fighter that can win?
The tallent is there but is the will? I am looking everyday to hear your response to the unanswered challenges your company is facing. But to let the minivan market go unchallenged for so long is a mystery.
If you don’t have the answer, who will???????
Just a quick note on the LaCrosse. The car is great as far as execution but the design may not hit the mark. Easy and inexpensive fix on the front end and back end. Don’t go spending trillions of dollars and throw the baby out with the bath water.
A simple yet dramatic update may just do the trick. The Lucerne will be a great car too but it needs to grab attention. My feeling is these cars hit the mark on execution, but add more character in the image of the Velite.
China and motorcycles
Recent moves by Harley Davidson, Aprilia and Ducati to make and sell motorcycles in China are interesting. I’ve been reading the book “The World Is Flat” by Tom Friedman and in it, he is interviewing a Chinese official who says:
Chinese people fi…
Obviously your GMDAT will pay off nice in the long run as I am sure it is already doing so with the current line up being distributed globally. China will be the biggest at everything in the future and I am not sure the USA is ready for this shift. It will be interesting to see where this all goes, but I am glad GM is poised to be in at the ground floor. As for the big picture… China will be the best at most things and it will be hard to accept. They think big and live big. Most people in North America have no idea what they are doing over there. Watch out as the car market is only a piece of the bigger puzzle.
Hey Bob,
China is definitely the future. With a population over 1 billion and a ‘communist’ regime slowly resembling capitalism more and more everyday, it is a market too big to ignore. Even if just 10% of the people could afford cars, that’s over 100 M consumers. The next battle ground is definitely China. Unlike the US, where GM is bogged down by a tarnished past, China offers a blank slate.
Do not make the same mistakes as you did in the US.
On a semi-related note… I just saw images of the T2X. I’m an further convinced that the guys that designed this and the S3X should be designing for North America! You want exciting and competitive designs? Look towards Daewoo! It’s a shame these hot new Korean designs are only planned for Europe and Asia so far.
I agree with your analysis of China’s potential for amazing growth in the automotive sector. Now, look at the big picture.
Increased Chinese consumption will surely increase global demand for raw materials like steel, aluminum and rubber, and of course, crude oil. This will result in elevated prices for these commodities, if not outright shortages.
Because the GM business model seems to assume huge growth in China’s economy, how, might I ask, has the North American portfolio been readied to handle rising raw material and fuel prices? Simply said, it hasn’t. In fact, it almost seems that GM is surprised that commodity prices have risen so much. You can’t plan for growth and then find yourself unprepared for it when it happens.
Mr. Right hand, may I introduce you to Mr. Left hand?
China looks promising! Starbucks plans to eventually have more stores there than they have here in the US.
One thing I’d like to see in GM cars Mr. Lutz, is less intrusion of the instrument panels into leg space, greater front seat travel, and steering wheels that would telescope significantly away from the instrument panel in small and large cars and trucks alike. The driving position in GM cars including the new STS, is too cramped.
The rant by Simon London in the Financial times about a new Pontiac Grand Prix that he rented is a case in point. His gripe was overstated and factually inaccurate, but his displeasure about the uncomfortable driving position does have some basis in fact.
Bob, the new Aveo is a great little car. The interior is class-dominating, never have I seen something so well done in that category from anybody, much less GM. In fact, to be truthful with you, it looks a little better than our own future Impala, which is obviously one of the best interiors we’re gonna have, since it was done under you. Your analysis on China is definitely thought-provoking; I can imagine the great industrial growth that will occur there over the next few years, who knows what will become of that populous nation. Again, thanks for the Aveo, hope it comes here soon, along with Astra GTC (ION), G4 RWD Kappa, G6 RWD/AWD Kappa, Camaro, Velite, CTC/cabrio……..ahh so many wonderful possibilities. Don’t let me down!
Lutz on the World’s Largest Car Market – China
Interesting reading, Bob Lutz talks about his recent visit to China and their growth prospects….
In response to Shaun. ” 10 % of chinese affording cars is 100 M cars”.
Correct me if I am wrong… Shaun, Bob, Any one!
Yes China and India will be big markets. There are profits to be made there, IFF (the math conditional) we (larger American, and Europian companies) last that long. Let me explain…
In order for chinese middle class to afford to drive cars like we do, they have to have good paying jobs.. Their middle class and lower class standard of living has to increase in order to afford buying and driving cars. A lot of these jobs are jobs that used to be, or are currently in Europe or US. Specially, when Cherry motors starts selling in US, and spacially when we promote capitalisim in China or India. Capitalisim at its best would be when they start to sell in Europe, or US. Right?
In order for 10% of Chinese or Indians to have cars (that’s 100 million cars in each country), there is that much demand for steel, Rubber (tires), leather, and plastics. Demand goes up, prices go up. Prices go up, GM, Ford , DCX and alike lose more money in North America. In order for their standard of living to go up, North American and Eroupian middle class standard of living has to go down. Be patient people, let’s get deeper into it.
In order for 100M chinese, and as much indians to drive cars, there is that much more demand for gasoline. Which means prices can easily double or tripple from here. Which means the end of Big SUVs for NA as we know it for larger population, and all these gas guzzling 400 – 500 hp muscle cars we are starting build again and count on, to make us money.
We are a vast nation, with very poor public transportation in 95% of our cities’ metro areas. We are wasteful consumers. Each adult in our housholds owns a car. We hardly like to share a ride or car pool. We don’t like small cars. We are intimidiated by each other’s big cars so we try to get bigger cars than them (every one wants to be safer by being in a tank). Heck my wife is only 5 feet tall and she loves suburbans to drive in. All by her own lonesome!. I am qouting from a car magazin from a woman who picked Hummer H1 for family car… ” I want for my family to be safe, I want to make sure if I hit something, I win”…. duhhh
If every one drove a cobalt, then we have equal chance in an accident.
We like a lot of power under the hood and love to smoke rubber. We generally, do not plan our daily trips to optimize gas use, and minimize wear and tear on our cars. We usually scrap our cars in 6-10 years and get a new one, while some third world nations keep using them 15-20 years.
We, as a nation, use a huge percentage of the total energy of the world as compared to percentage of our population to that of the world.
All this has to change qickly, in order for 10% of chinese and 10% indians to drive like we do.
We better get a lot of good small hybrids, and fuel cells out there ASAP, before 10% of chinese and indians start to drive. And we better not count on anything less than 30 mpg to make us money.
Right?
Kudos to GM for getting in early and working with this burgeoning market.
However, as I read of all the miles of highways and byways that they’ll be building, I couldn’t help but think of all the oil that will be needed to fuel all their autos. Since China is already causing a rise in prices with their current modest auto growth, I suggest what we should plan for in the future, when their wealth and auto use grows.
I think it’s excellent that GM has been working on the hydrogen module and platform. Now, all you have to do is convince either private industry or the gov’t of the need to develop a hydrogen refueling infrastructure, or an equally viable alternative.
I’m curious to know if you are also working on a higher-mileage clean diesel 4 banger.
But what about Trucks?
I have seen the GMC Top Kick “oversized” Luxury Pick-up on the road – and it is BEAUTIFUL! – but have NEVER seen it in any print or TV ads…. same goes with the Chevrolet Luxury KODIAK.
I’m going to bet with a little marketing, they, too, will be BIG Hits!
Here, in China, and, likely, WorldWide!
“GM, the Biggest and the Best WorldWide…
Get OnBoard!”
Best regards…
China under-rated?
I don’t think so. If anything, it’s over-rated.
Despite it’s 1.2 Billion people China has an economy the size of Italy’s, largely because nearly 1 billion of those 1.2 billion people live in the sort of poverty that makes car ownership the stuff of dreams.
The political upheaval due to the economic imbalances in Chinese society that is going to face China in the next few years is going to make China the last place in the world to try to expand the market for luxury goods like automobiles.
Further, there is no real enforcement of intellectual property law, so even if you do come out with a good product, it can easily be counterfeited.
This is a big problem, especially for GM, as even the counterfeiters probably wouldn’t have that hard a time matching GM’s product quality.
Come on GM, it’s time to quit worrying about whether Buicks will be big sellers in China, and start figuring out how to make Buicks big sellers here at home.
GM needs to sit down with its unions and start a joint effort lobbying Washington for national healthcare. With a national healthcare program, GM could get the multi-billion benefits albatross off its neck.
Then GM needs to start building cars people want. At present, the GM umbrella includes:
Saab
Subaru
Holden
Opel / Vauxhall
Saturn
Buick
Pontiac
GMC
Chevrolet
Cadillac
Hummer
That’s just too many brands making the same kinds of cars.
In order to go forward in a profitable manner, GM needs to slash a few of these, by doing the following:
Combine GMC and Hummer into one company and make industrial strength work trucks with enough attitude to make regular people want them (i.e. what made Hummer a civilian brand in the first place).
Kill the existing Saturn lineup and make them the American arm of Opel/Vauxhall, and just import the same European models converted to LHD and US Crash/Emission Specs. Also, merge Saab with Opel/Vauxhall. Let’s face it, Saturn’s success as an import fighter has been spectacularly unsuccessful.
Kill the Pontiac brand, as there’s too much overlap with Chevrolet, and just offer straight badge-engineered Pontiac special editions of future Camaros, Holden V8s, and other pony cars that will all come out under the Chevy name initially.
Get rid of the Buick brand, and just start putting Chevy badges on the better Buick models. With all the rebates, Buicks are getting priced down into Chevy territory anyway.
Then, once you’ve gotten rid of Pontiac and Buick, and made Saturn an importer of European cars, then GM can focus on building cars that people want.
It doesn’t take any longer or cost any more to design a good car than a bad one.
If GM can start building first-in-class automobiles again, then a successful future awaits them.
If GM keeps up with the same approach it always has, then it’s market share is going to continue to shrink.
After all, even with 1.2 billion people, China’s rental car market can only absorb so much GM product.
So, Bob, will there soon be a Chinese “GM AUTOSHOW IN MOTION”? That concept, which I enjoyed while in California, was something really unique, offering a chance to compare many vehicles without the pain visiting a dealer entails.
And will the Chinese get exposed to the too-rare GM clinics sometimes held here? That would seem a great way to get unfiltered, honest feedback from customers, and – possibly – enlist them to test new stuff while offering a way for GM to SELL new stuff.
As for the service and dealership setups in China, it will be interesting to see if they end up better than the abysmal morass here.
I actually sat in a Aveo today and I was shocked at how roomy and comfortable it was. Actually it was more comfortable than the Cobalt.
I hope you take some time to respond to some of our rants because you do have some answering to do:
1. Why does the Impala have the same butt-ugly steering wheel that it had since day one?
2. Who OKed the steering wheel used in the Malibu, Equinox, and G6 sedan and why is he still working for GM?
3. Why do you insist on using Pushrod engines in your cars when customers insist on more advanced engines that exist in the Japanese cars? Korean also as a matter of fact.
4. Why are you forcing electric steering down our throats when it is widely panned by car reviewers? If you know it stinks, why is every car you make switching to it? And apparently you know it stinks because the Malibu SS is going back to hydraulic steering. So why not put the better steering in all your models?
5. Who designed the front end of the Malibu and why is he still working at GM?
6. Why wasn’t the front end of the Malibu changed in the next model year when it is obvious that its ugly?
7. Why doesn’t GM have a 5 Speed Automatic in all of its cars?
8. Why are you afraid to take on the Accord and Camry head on and continue to build cars that are almost as good?
9. Why haven’t you heard about the RWD phenomenon currently taking place? I see Caddy CTS’s all over the place-guaranteed its because its RWD.
Bob, you have a lot of answering to do. We all would like to hear your responses to our concerns.
I think it’s laughable that the American consumer buys “power” (see: Dodge Magnum) over fuel efficiency. What used to be a “liberal” issue certainly becomes a mainsteam one when it affects the amount of disposable income you have left at the end of the month… At any rate, please get your engineering colleagues on board and push for better fuel economy in your cars NOW.
Question: Is this newly designed Aveo going to be sold here or do we only get the homely current version?
And where are the pics of the interior of this new Aveo that someone mentioned?
I wonder why the Aveo has more interior room than the Cobalt and is more comfortable? Perhaps you should take your Korean designers and replace your American designers!
Well, not to be cynical but that’s good news that GM is able to rely upon China to boost its sagging sales all because Chinese don’t own cars. They mostly ride bikes with carts and I understand why. Because its crowded. I think China needs something big, like a Ford Expedition or a Chevy Suburban so that it would cause the greatest havoc of all. The economy would suffer because the donkey carts and bicycle taxis wouldn’t be able to navigate around the big American made behemoths.
We’ve possibly prevented WWIII by passing onto the enemy oversized vehicles that make no sense for the market over there. WTG Bob!
Now I find it very mildly interesting GM has finally found a country to sell its cars to because it ain’t not doing too good over here in the old US of A. I’ll take my GTO with two egg rolls, some orange chicken, and a fortune cookie; Thank You.
Save the GTO, not China’’s ability to use our vehicles against us in war!!!!!!!!!
This is off topic from China, but I felt I had to send this note somewhere. I am a GM salary employee with a sister working at JCI. We are a GM family. Yesterday, she bought the first non GM vehicle in our history of five siblings buying GM for 30+ years. And her reasoning just kills me. When will we get it on the small stuff? Here goes:
“Hey,
Thanks a ton for your help on the pricing and the family discount
authorization. After all the research and comparing apples to apples we bought a Pilot today. With your discount + current rebates on the Envoy ($4000 !), we were within $300 of the Pilot pricing at the bottom line. So price was a non-issue.
Our choice came down to function/efficiency (Pilot) vs. styling/comfort (Envoy). It was interesting to me to be in the consumer seat as this is what JCI works on to please the market all day – - function and styling/comfort. The Envoy is very plush and after driving one a couple of times, I got used to the truck feel of the drive/ride. It’s pretty and comfortable inside.
The big decision maker was the 3rd row in the Pilot that is standard and folds flat into the floor (good job JCI). The Envoy with a 3rd row was an upscale XL (+5,000 at a min) and it’s cargo space was crap when it was folded down (bad job JCI). The Pilot fuel efficiency was also slightly higher than the Envoy. Lastly, the little stuff like storage, cupholder and stuff was better and of larger scale than the Envoy. The downfall is the Pilot has no style. None in my opinion. So my practical side beat out my need for plush.
In the end, I bought a JCI product but gave in to the Japanese. But it kills me to work for them and then buy their product since they are so annoying. Oh well. Done deal.”
This is a sad day.
The Chevy S3X.
Will it be sold here, and if not, why? It looks better than the Equinox and I bet it rides better too.
Those Daewoo designers are much better than what you have in the States, sorry to say.
Check this link:
http://www.worldcarfans.com/news.cfm/newsid/2050301.004/pageview/photo/photo/Mini8/page/1/chevrolet/1.html
Do you have any response to This article in Business Week/a> “Why GMs Plan won’t work”. Also, when I went to the auto show Saturn had unvieled the Sky, what is the feasibility of GM bringing a sexy car like this to market.
I have a request:
Please make fuel economy a PRIORITY! With the prospect of millions of more drivers and cars on the road, gas prices are going to continue to rise. There is a set amount of gas in the Earth that is only getting smaller with every well. That combined with increased consumption (not just in cars) means the little gas we have left is being consumed quicker.
I’ve read and written about hydrogen powered automobiles and while I think you are getting a good head start in them, we need an interim solution to ease the pain at the gas pumps.
Please give us hybrid cars in the image of the Toyota Prius and the Honda Accord Hybrid that achieve gas mileage in the 40mpg range (real world driving, not EPA numbers).
Also please try to increase the mpg of regular combustion engined cars, specifically mid-size cars so that families do not have to strain to buy gas in a suburban society that requires automobile usage. With gas prices already over $2/gallon at the beginning of summer, the price will no doubt continue to rise.
Thank you for your time and attention.
I too would like to know if North America will be getting this new Aveo.
While you’re at it, give us the Chevrolet S3X, make it a Saturn if you have to, just give it to us!!
Keep working hard!
Here is GM’s problem in a nut
shell.
1)We are tolerating a administration that is killing our products with high gas prices and no energy polices worth talking about.
2)We have a GM corporate culture that does not see value for it’s customers or it’s employees.
3)End of Story…….
Here’s your wake-up call Bob: Chery. I’d be more concerned about the Chinese automaker cutting into the US market than expanding GMs territory overseas. The Australian bred “GTO” ( aka Monaro…sorry, you didn’t fool anybody on that one ) is the posterchild for GMs erroneous global focus.
Mr. Lutz,
Everywhere I look I see an article on GM. I have read the Forbes cover story, the mention of this blog in Businessweek, but the most interesting column I have seen is today’s piece by George F. Will. Will says that GM is the first modern-day welfare state to collapse. The irony is that GM would collapse under the weight of its benefit programs, completely indifferent to the quality of the products they produce.
I expect you will reject the premise Will proposes that GM is collapsing. I also completely understand if this comment is too off-topic to post publicly. Let this be a head’s up to you for the George F. Will opinion piece.
I have seen corporations face worse odds and succeed and GM has the resources to overcome this one. My family has a Pontiac and three Honda’s, for what its worth.
So where are the Chinese people going to get the money to buy all these cars? We keep sending jobs over there because labor is cheap, and it’s cheap because they pay workers squat and give them no benefits. So are we going to start paying them more so that they can buy our cars (which means that your costs go up), or are you planning on selling vehicles for less in China than you do in the US? And if so, how and why?
When are you going to stop selling Cadis at Chevy dealers? Who wants to buy a $50K car form a man (or woman) wearing a $100 suite? Do Toyota dealers sell Lexus, or Infiniti sell at Nissan dealers? Don’t you get it..Image is everything. Give me leather couches and Starbucks coffee, pamper me and I will pay the premium. Once I buy the car then we will talk about quality. We need to rebuild the Cadi image, so lets start with the showroom. You only have one chance to make a first impression. I like that commercial where the black Mercedes and BMWs are doing a “waltz” and then comes in silver Cadi stirring things up. Notice how nice the room was where those cars were. How disappointing when I got to my local dealer…goodbye Dom Perignon HELLO wine in box.
Another thing about GM domestic sales…
Why is it impossible to get an actual quote on a GM car from a dealer after you fill out the form on the website?
So far they’ve all e-mailed me back asking me for a fax number or to call them so I can hear the usual sales pitch.
I don’t want a sales pitch, I just want a price! Honda and Toyota understand this concept, and you don’t see their American market share dropping!
What’s wrong with the GM dealers?
With the announcement today that Toyota, Honda and Nissan experienced excellent sales during the past quarter and GM and Ford sales were both down, I just shake my head in amazement, disbelief and shame.
As a Saab and an Oldsmobile owner, I know first hand that GM is capable of making excellent cars. However, upon visiting my local Chevrolet dealer and test driving the Impala, Malibu and Monte Carlo, I am convinced that GM remains in many ways steeped in the past traditions when it comes to designing cars for the masses. It seems to me that the latest market share numbers make it plainly evident that more and more people are moving away from typical American vehicles and into smaller, more modern looking Japanese vehicles. Why can’t GM see this? Why does GM live in denial? I feel so bad for GM and all the people who work hard for the company. You’ve got great people, hard working and intelligent employees. So why does GM continue to avoid producing cars which appeal to the same tastes as the Japanese automakers.
What surprises me most is that in Europe, GM sells some great looking, efficient vechiles under the Chevrolet name, but many of these same vehicles are unavailable in GM’s largest market, the U.S.
I don’t have any statisitical proof, but I know in my heart that if GM would sell the kind of vehicles in America that they are already selling under the Chevrolet name in Europe, they would win back a lot of cutomers. Check out http://www.chevrolet.fr and look at the great vehicles for sale.
Come on Mr. Lutz, we are all counting on you. I know your job is hard, but you have got to do something to save GM and it has to be a big move, not foolish things like putting a GM badge on every car.
Please, for the sake of GM and the American enonomy, embrace change, don’t ignore it.
If you would let me, I would work for you for free to help bring GM back to its proper place of respect. What’s good for GM is good for America. There are so many changes to make. Please, Mr. Lutz, don’t let us down. Most importantly, let us know what we can do to help out. This Blog site is a good start, but more is needed.
SUV’s were a great band aid in the late 90’s, but a permanent solution is needed and that kind of change can’t happen unless there is a real desire from the top executives at GM to change how they think, and how they execute.
Sincerely,
Nicholas Davis
cow@chartermi.net
Kudos to the person that said bring the S3X to America. You are absolutely insane if you don’t bring that car to the states. Now this blog and person is here to help no doubt.
But the person that suggested you get rid of all your brands and sell just plain vanilla. That person is sick and he should be charged with throwing the baby out with the bath water. Now that person does not help you.
Blogs are like searching for diamonds, you get a lot of coal like that person but every once in a while you will get a jewel. I hope you can tell the difference between what should be disguarded and what you should keep. If GM and Bob are prospectors, you will truly listen to us your fans, customers and yes your enemies are here too. But when you get all the jewels collected, take that free advice and cash it in.
Take the advice about the S3X you can not have too much of a good thing. And the Cadillac BLS, why not? It will not hurt Buick if they make the Velite. Bring those cars to the states. Sell Opels in California. Sell Pontiacs in Australia while we are at it. This is advice you may want to consider.
But don’t take the advice of the brand choppers, it will be your bane.
>I don’t have any statisitical proof, but I know in my heart that if GM would sell the kind of vehicles in America that they are already selling under the Chevrolet name in Europe, they would win back a lot of cutomers. Check out http://www.chevrolet.fr and look at the great vehicles for sale.
China’s nice, but home is where the heart is
Bob Lutz has been touring the Orient, visiting Shanghai’s Motor Show and various GM installations over that way.
Alfred Sloan on How the Old Master Failed to Master Change
LaSalle (1927)
In his discussion of how U.S. automobile markets transformed in the 1920s , Alfred Sloan wrote about four important trends: installment selling, the used-car trade-in, the closed-body car and the annual model. (Chapter 9
I was watching the Geneva Auto show on TV and I saw a beautiful small Cadi that will be introduced in Europe ONLY. My wife wanted it, but you said she can’t get it (by not offering it in the US), so we got a BMW instead.
Cadi needs to go head to head against the other “premier” brands. Cadi needs to cut it connection with other GM brands (perception wise, it is all under the GM umbrella but not one needs to know that).
Here is the fix:
1. Separate Cadi from any other GM Brand. (in showrooms and advertising. Create nice Cadi showrooms. GO visit a Lexus dealer and you will see).
2. Create a relatively inexpensive entry level Cadi to compete against BMW e series, Benzes C class, Audi A4’s (you have a new one in Europe, bring it on over). This way you introduce young buyers into Cadi and then when the make more money they upgrade (Assuming they have a good Cadi experience). How is it possible that the CTS can sell from $30K to $41K; the STS can sell from $40K to $60K. If I am spending $10-20K more than my neighbor, I want everyone to see why. I don’t want to tell them that I got the Bose stereo, and the seats that have memory settings, and the 17″ wheels, it is still the same car.
3. STOP using cheap plastic interiors.
4. Toys, Toys and more Toys. Load up the Cadis with the latest Technology.
5. Use what you have learned in designing these cars and apply to regular Chevy dealers, without cannibalizing Cadi. Cadi buyers pay for the R&D premium and Chevy buyers get a taste of the good life and hopefully upgrade.
6. Marketing, Marketing and Marketing. Put Cadis in music videos, movies, X-box games, etc. Hire people to drive them on Park Ave (NYC), Ocean Drive (South Beach, Miami), Rodeo Drive (LA), Las Vegas strip, etc.
I got to get back to work, I have a BMW to pay for.
Thanks.
PS: I am just kidding about the BMWs, I was just trying to make a point.
Someone sent me a link to the new Aveo interior. Its interesting if not a little cartoonish. I think it has 4 colors in it which is a bit much.
I also don’t understand the appeal to the gated shift lever. Its more a pain in the butt than anything else.
Those steering wheel controls need to go also. They are too intrusive-just as intrusive as the ones on all the Suzuki’s.
Hello Bob,
I have been making regular trips to China and being from the Detroit area I always ask the locals about vehicles. Here are my observations & comments…
1) The locals view VW taxi’s as low quality vehicles. This is because they are always in poor condition. (and because VW’s of this era have many inherent problems) So this is a “leg up” when comparing German cars to US cars. The premium German cars are admired, but considered out of their league near & long term.
2) They like the full size Buick and consider it a quality piece. For goodness sake quit diluting the brand with the little Buicks. You need a separate brand name for the small affordable cars.
3) On a political note, if we could get the US to back off supporting Taiwan independence and change to a stance of long term uniting like the Hong Kong model, they would BUY our products in preference to Japanese models. This is especially true when I was there a few weeks ago when they had several demonstrations against the Japanese consulate.
3) Japanese quality is recognized, but they would like an equal alternative because of the past war history. GM does not have the quality perception baggage of the late 70s-80s in China, so that is a positive to build on.
4) I did not see any dealer presence or advertising in the city I spend most of my time (Xiamen) But I see a strong presence of competing brands, mostly German & Korean.
5) Since most have not driven, they do not know the difference between push rod motors, overhead cams, handling, etc. So looks, price, & reliability will sell. I would retain reliable proven drive trains in all volume models selected for sale in China so you get a good reputation. Long service life, common service parts, easy to service.
6) Despite the hatred of the Japanese for war crimes, they still align with Asian countries which gives them an advantage. The perception of the US philosophy is tied to trend setting & being successful. So our higher end cars (ie: full size Buick & CTS) should push this in advertising. I am surprised at the power of branding in China.
I certainly hope the photos of the new Aveo’s interior are not indicative of how it will actually look.
All those different colors make me nauseous. Just make the entire top panel all black, not 4 different shades of puke.
China? Think Chery. Yes soon they will be stealing from US automakers and building their own vehicles. The good news is they will be coming here next.
Hi,
Mr. Lutz, GM is looking forward to capitalizing in the China market. Good. Whatever it takes to save the Titanic, I mean, GM from sinking.
To those who are against it because China has a communist form of government. SO WHAT!?!? Who cares? It’s a government, and it works for them. So US automakers, along with other products want to boom in China, “but they’re communist!” SO WHAT!?!? Who cares? If it means a US born company can grow more and globalize by selling their product in a communist country, SO WHAT?!?! That’s a good thing. It means GM will grow stronger, more profitable, so will (eventually, gradually and little by little) the US economy.
Gas will be more expensive you say. Yes, it will be, and this will occur regardless, whether GM does business in China or not. The all mighty war against SaddamBinLadinTerror in the mid east has much more to do with that than business in China. Calm down, it’s not the end of the world. Bring on the gas saving, economic, easy to maintain Daewoos. Call them Chevy, Saturn or Pontiac, whatever, call them Suzy Cutie Button for all I care, just bring them and help your company grow. Bottom line, these Korean cars are more reliable, durable, better designed and economical than ANY US manufactured vehicle.
I don’t care how patriotic you want to be, the truth is the truth. Put any Daewoo/Korean Chevy on the road today against any US built Camaro, Century, Sunfire or Cavalier and you will see the reality. Also, better warranties are offered. Why do these little Korean match box cars do so well overseas?? BECAUSE THEY LAST, THEY’RE RELIABLE, DUARABLE, WELL BUILT, ECONOMICAL, PRACTICAL AND EASY AND INEXPENSIVE TO MAINTAIN. I want more of these in the US. Those huge HUMMER SCHOOL BUS MOTOR HOME TRAVELING CITY ON WHEEL SUV drivers are screwing it up for everyone. If I want something that big, I’ll get a motor home. I don’t need a car the size of the local city hall to carry the kids to school, buy groceries and go to work and back. I have a car and a motorcycle that do that just a well, if not better, and save me more on gas, insurance and re-sale stays up to par. I can understand the utility in these monsters, I like them and I drive a mid size SUV, but why do I need an H2, they’re great looking, cool and have alot of gadgets, but let’s get real. I don’t travel through undiscovered territory on a daily basis to go get my groceries. Gas is not expensive because the Chinese are going to get roads. It’s supply and demand people. you want it, you need it, we’ll sell it to you, for a nominal fee. That’s it, supply and demand. it’s the same with gas, milk, cars and food.
But China is communist you say. SO WHAT!?! Quit your belly aching!!! GM can’t help nor control what type of government system is in place in China, or anywhere else where it does business. Learn this: BUSINESS IS BUSINESS. Just because I do business with a catholic, a muslim, a buddhist, an athiest and a Jehova’s witness does not mean that I believe or support their believe systems or religions, it’s just business. Just as well, if I or Gm, Ford, Chrysler or Harley Davidson or Toyota do business in Russia, India, China, Iraq or Cuba, it does not mean that I support or agree with that government system, it does mean that I am trying to improve my market, my income, my company as a whole and spread my services or good and better my income and bottom line, it’s just another way of making more money. BUSINESS IS BUSINESS, communist country or not. It’s all about the almighty buck. Communist china, buddhist china, democratic China. SO WHAT!?!?!? Many of us love Chinese food, do you stop eating or liking Chinese food becuase it was originated in a communist country. NO!!! Those of us that enjoy cigars, would you reject a genuine authentic Cuban Cohiba, from Cuba if it were offered to you to smoke and enjoy without penalty? I would accept it and smoke it in a second, regardless of Castro’s regime beliiefs and government system. The quality and enjoynment of a Cuban Cigar from Cuba is second to none, so I would enjoy the stogie, no questions asked. Does that make me a communist, to know quality and enjoy it. I THINK NOT!!!!! I say, Good for GM and anyone else that tries to capitalize in any market. Communist, dictatorship or otherwise. If the people in those countries don’t agree with those governments, do something about it, rebel, leave, move. I for one feel that the embargo on Cuba should be lifted with limits. Help them people out, stop being selfish, and resolve these silly things that were imposed in the 50’s and 60’s, for that time. Times have changed, and things need to be done. So do the same. Help out the US by selling in China.
I thought the slogan was “What’s good for GM is good for America.” SO there you go. Help America out and embrace the concept.
Mr. Lutz, carry on, take the GM legacy to the rest of the world, and bring here those products that make sense. The SUV hype will not last long. Give me a Chevy Daewoo that gets over real 35 mpg, with a 5/60 warranty, easy and inexpensive to maintain like you do in europe, south america and elsewhere.
Good luck in China and the rest of the world. Keep up the good work and bring on them Korean gas and money savers.
For those of you who don’t agree, quit your belly aching, learn what business is all about and support your American Companies Endeavors overseas. What’s good for GM is good for America, brother!!
Best wishes,
SO WHAT!?!?
As GM Ford and Toyota dealer for over 30 years. The excetives I have a personal relatioship feel within 3 months Toyota will buy G M This has been a roomer since their joint venture cars. Take it to the bank Kasha
I spend about half my time working here in Korea. I usually rent Sonatas, but my wife was with me recently so I rented a Daewoo Lacetti for her. What a fine small car, Civic sized. You really ought to consider importing to the US.
I would love to invite all the people on this site with negative posts about GM dealerships to take a leave of absence from their current professions and work in the sales department at a GM dealership for 90 days. Base your income on 25% of the gross profit of a new vehicle sale and at the end of your 90 days weigh your total income against the efforts you spent to earn that income.
There are bad apples in every barrel, but there are sure a lot of good ones.
Becareful Bob,
Have all the lawyers and connections with the Chinese Government all line up. The Chinese are gonna copy your product and sell it for half the price.
What GM should do in Chinese market.
Hi Bob,
I came from China and I think I could give your some suggestions from the view of your chinese customers.
What GM has done in China so far are quite good, the market share of our autos increases steadly from the last two years. But we still…
China’s nice, but home is where the heart is
Bob Lutz has been touring the Orient, visiting Shanghai’s Motor Show and various GM installations over that way. As Bob mentions in the blog, carmakers will ignore Asia at their own peril. Not only is the market there in it’s…
Been reading in the news recently about GM’s pension & healthcare woes.
While no doubt real, surely other countries workforces have pensions & healthcare.
What’s the key difference? Could it be that the European and Asian countries provide pensions & healthcare at a national level rather than a corporate level?
If so – is this a governmental subsidy that should be looked at by the WTO, or perhaps America just needs to get with the program.
What are your thoughts?
Mr Lutz,
Capitalizing on China’s perceived rapid growth over the next 10 years is probably a good thing.
However, my concern is America. It seems we are continually shipping our jobs overseas for cheaper labor and fewer environmental restraints. If American companies continue to ship our jobs overseas, there will be no consumers left in America to buy GM products.
GM workers to kick in health care dollars
GM workers to kick in health care dollars
12 Nov 05 00:00:00 PST
St. Petersburg Times – General Motors Corp. got some relief from its spiraling health care costs as auto workers agreed to pay more of their health costs. … sale of it…
it’s amazing what the power of the internet can bring to the world. There’s a LOT of good ideas in many of these comments. First of all, I’m a GM fan. Born and raised in Peru driving a 65 Chevelle Malibu made me appreciate the american muscle car early on, and I have owned nothing but American cars. I have read about the quality issues that have plagued not only GM but all american brands in the 80’s which have become a shadow that GM seems specially unable to completely shake off. I have driven many of today’s GM products, and compare them to their import equivalents, and I can honestly say that for the most part GM seems to have corrected their mistakes, although one point with which I agree in one of these posts is the excessive use of CHEAP plastic still present in some of the lower-end models. Cheap cars don’t necessarily have to LOOK AND FEEL cheap. As for the brands issue, I do agree that some trimming needs to be done, or otherwise completely differentiate the upscale from the entry level. It’s simply disheartening to put the little GM side badge on a lowly Cobalt and then seeing it on an STS. I thought the different brands were meant to differentiate these cars, and here’s GM equalizing them all. I would hate to see the Pontiac brand go, or any GM brand, but some trimming needs to be done, and more product differentiation. So far GM seems to be taking some good steps in that regard, but much needs to be done. And for the love of god get rid of the discounts! People now are used to them and many won’t even consider buying GM without them. You now have a lineup that can attract customers because of the products, not because they’re deeply discounted.
Keep the Pontiac GTOs, the Solstices, the Saturn Skys coming. Keep working hard on hybrid engines and keep working in differentiating your products enough so that customers really can see what a Cady badge is worth, not only money-wise.