GM Says Uncle: US Will Never Catch Up With China Again

Bertel Schmitt
by Bertel Schmitt

Kevin Wale, president of GM China, is convinced that China has passed the U.S. for good as the world’s largest auto sales market. He expects China’s growth to continue, creating a gap that will be too large for the U.S. to close, says AP.

As reported ad nauseam, vehicle sales in China last year rose 46.2 percent to 13.64m units. For this year, cautious industry association projections expect somewhere between 15m and 16m units to change hands.

Wale thinks Chinese auto sales will be anywhere between 14.5m to 15.5m by the end of this year. For the U.S., analysts predict 11.5m to 12m.

Very optimistic analysts reckon the two countries could be trading places until 2015 when China firmly takes the lead. Wale isn’t one of them. He doesn’t think the U.S. will ever regain the lead.

This time, TTAC agrees with Wale. “China will grow again next year, which means that the U.S. has to pick up five million in two years to stay in the race,” Wale said. “Got your chips?”

And then there’s the perception gap, China style:

Many U.S. buyers have negative impressions of GM brands because of quality problems “of the past,” or because the company was in bankruptcy protection and had to take U.S. government aid to survive.

In China, GM brands, especially Buick, are well received among China’s growing middle class and younger population. Interesting data point: The average age of a Buick buyer in the U.S. is 66, Wale said, but it’s half of that in China.

Kevin Wale has reason to be boisterous. Whereas GM has, well, fiscal problems, GM is solidly profitable in China, Wale said, without giving specifics. Here is some indication: Joint venture partner SAIC, who not only has GM, but also VW under its belt, announced a few days ago that its net profit rose more than nine times compared to 2008. Which would amount to $900m or so this year. SAIC sold 2.72m units this year. Of that, around 800K GMs. Back of the envelope: If GM realized $150m in profits in China, then they’ve been doing really well.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Imag Imag on Jan 15, 2010

    This guy is a genius! China a bigger market than the US? China will dominate the 2000's in the same way the US dominated the 1900s? Really? Sorry about the sarcasm; this just seems completely obvious. China is going to raise the bar on production and implementation in all categories. This is just the very beginning.

  • FromBrazil FromBrazil on Jan 15, 2010

    And a sad day that will be. When China rules the world. FWIW Brazil is much more akin to the US than China culturally. So a US dominated world feels "natural", but a China one will surely feel foreign.

  • SCE to AUX I've never been teased by a bumper like that one before.
  • 3SpeedAutomatic R&T could have killed the story before it was released.Now, by pulling it after the fact, they look like idiots!! What's new??
  • Master Baiter "That said, the Inflation Reduction Act apparently does run afoul of WTO rules..."Pfft. The Biden administration doesn't care about rules. The Supreme Court said they couldn't forgive student load debt; they did it anyway. Decorum and tradition says you don't prosecute former presidents; they are doing it anyway. They made the CDC suspend evictions though they had no constitutional authority to do so.
  • 1995 SC Good. To misquote Sheryl Crow "If it makes them unhappy, it can't be that bad"
  • 1995 SC The letters on the hatch aren't big enough. hard pass
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