By on November 23, 2010

Yesterday, Ed introduced us to the latest addition to GM’s brand portfolio, the BaoJun. Introduced in China, it is allegedly slotted below the Chinese Chevrolet and the Chinese Buick, and supposedly, it is targeted at “first-time buyers in the nation’s second- and third-tier markets,” or so the propaganda goes. The car is made by the SAIC-GM-Wuling (SGMW) joint venture. We’ve had our eyes on that brand for a while, and eyed it with interested suspicion. The suspicion seems to be warranted.

China is brand crazed, but Chinese companies still need a little help in creating brands. (Quick: Name some Chinese brands with worldwide appeal? Thank you.) Why the joint venture would pick a new brand for China is a mystery. Doesn’t GM have a lot of used ones sitting around? I mean, even an Oldsmobile or a LaSalle would have more brand cachet in China than a “BaoJun.” (Which stands allegedly for “fine horse” – gee, why not Mustang? Sorry, wrong company.)

Now, information transpires that puts the undertaking into a more plausible light: According to Shanghai Securities News  (via Gasgoo) “unlike other homegrown car brands, the BaoJun was initially researched and developed for export. SGMW has already started export of its mini vehicles, and has taken its first step towards output of products, management team and operation model in India.” So BaoJun is actually part of the GM-SAIC-Wuling plan to take over India.

And that just the beginning. According to the paper, the SGMW JV is now considering to supply the car to other markets also, as CKD, or as whole production.

Other than many homegrown Chinese offerings, the car should pass muster abroad: “The compact sedan features a highly efficient GM powertrain that meets all local emission standards as well as the advanced Euro IV standard.” No news about crash tests, but with the help of GM engineers, it will survive those just as easily. We’ve said it a while ago: Deep in the BaoJun lurks a Buick Excelle.

Now why not export a Buick Excelle just like the Chevy Sail? Simple: A foreign car is licensed to the joint venture. With a homegrown car, even if it’s just homegrown on paper, the designs of the allegedly self-developed car are owned by the joint venture. When GM bought 10 percent of Wuling, a company that builds a million cars a year, and when GM paid only the nominal sum of  $51m, I had my suspicions that other payments must have been made. In the bargain, GM also agreed to provide technical services. Here appears to be a product of one of these technical services.

So everybody is freaking out about cheap Chinese exports flooding world markets and putting everybody out of business. It’s not happening. Until the Chinese receive help. From a company partially owned by the U.S. government and partially owned by the U.A.W. Isn’t life full of surprises?

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24 Comments on “BaoJun: China’s Trojan Export Horse. By GM...”


  • avatar
    cmoibenlepro

    Export???
    Who would buy a Bao Junk?  I am not even sure how to pronounce it.

    • 0 avatar
      Robbie

      That has been said before about Toyota, Nissan, Hyundai, Kia…

    • 0 avatar
      BDB

      Yes, and it was also said about Yugo, Fiat, Daewoo, and Renault in the US market, too. “They made fun of Toyota ad Hyundai once, too!” isn’t the automatic argument winner people think it is.

    • 0 avatar

      Quite a number of people buy Chinese cars in places like Russia. This leads to absolutely hilarious discussions in part stores: “Would you like the Chinese original or French knock-off substitute?”

      BTW, one thing that people who think they are funny on the Internet need to keep in mind is that “Jun” rhimes with “June”, not “junk”. Read “Manchester”, write “Liverpool”.

  • avatar

    Wow… color me surprised. The Chinese needed to use GM as a Trojan Horse to get into India, and now the plan is to sell Chinese-branded cars there? Huh?

    • 0 avatar
      BDB

      Don’t look now, Ed, but I think someone just jumped the shark.
      I mean, they’re going to make a Chinese version of Geo? That’s why you think they created this brand? Really?

  • avatar
    Mr Carpenter

    cmoibenlepro – the thing won’t be sold under the Chinese name in the USA if / when it comes here. 

    It’ll be sold as a Chevrolet –

    Chevette? 

    Citation?

    Cavalier? 

    Chevair? 

    Corsa? 

    Even priced at $9000 fully equipped (instead of $7000 poorly equipped in China), and assembled from CKD kits in Mexico (hence, a “NAFTA” free market car) – idiots would buy it.

    My father used to say “GM could put their bow tie on the ass of an ass, and people would buy it.”  He was right. 

    Anyone else remember how well these vehicles sold for Chevrolet? 

    Corvair.

    Vega.

    Chevette.

    Cavalier.

    Citation.

    Celebrity. 

  • avatar
    Mr Carpenter

    Oh, I suppose Buick dealers could sell it.

    “Opel by BaoJun”

    Somehow it doesn’t even have the cachet of “Opel by Isuzu” (1976-1981). 

  • avatar
    philadlj

    There’s nothing remotely underhanded, illicit or dastardly about creating a new brand from scratch specifically for a certain segment of the (hella big) Chinese market. Making too much of this.

    • 0 avatar
      geozinger

      (begin sarcasm) “There’s nothing remotely underhanded, illicit or dastardly about creating a new brand from scratch specifically for a certain segment of the (hella big) Chinese market. Making too much of this.”
       
      Yes, there is… IT’S GM! You know, fountain of evil throughout the universe!!! (end sarcasm)
       
      To Bertel’s assumption that: “From a company partially owned by the U.S. government and partially owned by the U.A.W….” So, what prevents VW, a company partially owned by a government and a union, from doing the same thing? With Suzuki? In India for example?

    • 0 avatar

      It is interesting to read how the former China haters now suddenly turn into China lovers. It took a while to register, GM had been there since the late 90s. I can only imagine that the UAW ownership of GM introduced this change of heart. No more “slave labor”, no more “Chicoms”, no more “we’ll never get our money out” – now all we hear are stories about the great profits in China.
      FYI, VW is 20% owned by the government of their state. Union owned? The unions own nothing of VW. Also, you haven’t heard the rabid anti-China rhetoric from that corner, they know what they have in China and they actually export a lot of cars there. Despite low domestic sales, German car production is up, reason: China. Also, VW has no current plans to export from China, they export to China like gangbusters. Also, Volkswagen wasn’t bailed out, to save “a million jobs.”
      Don’t you think it’s a bit odd that we bailed out an auto industry to “save a million jobs” and now the bailed-out companies create jobs in other countries? The U.S.A. is supposed to export itself out of the crisis, and what do we export? Car designs. And distribution channels.
      I’m a free market guy, and I see nothing wrong with making your product in the most cost efficient way. If it’s in China, India, Thailand, so be it. It’s business. What I am taking issue with is the hypocrisy.

    • 0 avatar
      BDB

      Are we supposed to take concern trolling about American jobs from a German who exports Chinese-made parts for a living seriously?

    • 0 avatar
      Steven02

      Bertel,
      GM is a global company.  Production is everywhere.  The bailout a number of jobs, that is really hard to calculate.  But saying GM can’t run a business like it needs to because it was bailed out would be inviting it back to the bailout buffet when it has problems again.
       
      One question I have is how are German car companies exporting lots of cars to China and still making profits?  Is it higher prices or are they being made in other low cost labor countries?  My guess is that over time many car companies will be shifting where production is made to lower and lower cost areas, like Toyota and its problems with profitability now.  As time and currency values change, I am guessing this will be seen more.

    • 0 avatar
      BDB

      I’d guess part of the answer is fleet sales. Party bosses love them some LWB German sedans, and VWs are popular taxis and cop cars. One out of five Audis in China is purchased by the government.
      http://www.chinaeconomicreview.com/cer/2010_02/Inspecting_the_fleet.html

    • 0 avatar
      geozinger

      @Bertel: Many of your posts are about the big evil GM teaming up with the “Chinese”, while you sell parts for the Chinese. You criticize the American car manufacturers being state owned and unions having a significant interest in the same companies. VW is partially owned by the state and I’m pretty sure that IG Metall has a say in what the German manufacturers produce. Tomay-to, Tomah-to… (tomato, tomaten)…
       
      You entirely miss the point of my sarcasm; the evil GM and the Chinese are coming to take our jobs away (North America) or some such thing, is nearly always the subject of every posting. VW is linked to SAIC too, very few posts on that. Or BMW’s or Daimler’s business partner in China… Warum?
       

    • 0 avatar
      BDB

      @geozinger

      Right on.

      I’m getting very sick of Bertel.

  • avatar
    Mr Carpenter

    There’s nothing illegal or even immoral about what GM have done. 

    As an American taxpayer, however, I’m pretty unhappy that I’ve been unwillingly forced to bail out a huge corporation with money which I would not have used in that way;

    Pretty unhappy that legal bondholders (including those held by retirement accounts which may even include yours) were screwed over immorally by the current administration – and first rights of bondholders were mowed under illegally in lieu of unwarranted “gifts” to crony pals such as the UAW

    And finally, I’m displeased that even more of our taxpayer money is being used to bring wealth to a company which clearly has little to no interest in exporting cars FROM the USA to these other nations and which is using their monies to build up their corporation elsewhere in the world in lieu of investing in American workers. 

    (Though with the UAW blood-suckers, who can really blame them, on one level). 

    BTW doesn’t this car resemble the new Suzuki Kizashi, or is it just me? (Not forgetting that while Suzuki was still developing the Kizashi, it was part-owned by GM…..)  Hmmmm, interesting, that…..

    • 0 avatar
      Steven02

      Bondholders weren’t screwed.  This comes up about every other week.  They weren’t screwed then and aren’t screwed now.  People who had unsecured debt were have gotten ZERO money from any form of GM bankruptcy.  They ended up with something like 37 cents on the dollar when they should have gotten nothing.  Why do people care so much about this?

    • 0 avatar
      Daanii2

      Why do people care so much about this?

      I can’t speak for others, but I feel the GM and Chrysler bankruptcies were an illegal and improper exercise of government power. The government spent $100 billion on the carmaking industry to bail out the workers and their union. That was wrong.

      Our bankruptcy law has developed over the decades, even centuries, to be fair and effective. Bankruptcy law represents the best way to restore troubled companies to health, or if they are too far gone to save, to divvy up their assets. Impartially and certainly not politically.

      With GM and Chrysler, all that law was thrown out of the window. Steve Rattner was given the power to do whatever he wanted. A power that Barack Obama did not have to give. And he used funds that George Bush and then Barack Obama had no authority to use.

      People talk as though the American economy would have collapsed if the carmaking industry had not been fed the $100 billion. People talk as though Barack Obama saved the country from the second great depression. He himself makes that claim.

      Some people, though, disagree. I’m one of those. I think the government has made things worse. I think too much money has been spent on too little. For political reasons rather than for the good of the country.

      That’s why I care so much about this.

  • avatar
    CJinSD

    I don’t think anyone is getting the point. This won’t come here as a GM car. It will be a Chinese car with up to the minute GM technology and spec for a price reflecting that GM basically paid them to take a couple billion dollars worth of intellectual property. Our tax dollars will facilitate the continued fleecing of the US by China. It is almost like Clinton is still in office.

    • 0 avatar
      BDB

      Sooo…we’re told that the North American market is declining and won’t matter anymore…but OTOH they have a secret plan to export to the North American market, even though the Chinese market is growing and ours is at best stable?
      What?

    • 0 avatar
      Mike999

      CJinSD, you must be a Crack Pipe Republican.
      Everything about your post was accurate, until you try to cleanse the Republican Party of all wrongdoing, and blame Clinton.  This is why the American Citizen is getting Fleeced.  You should be yelling and screaming at your Republican-Tea-Party for changing US Tax Laws to actually Reward US Jobs being Shipped to China.  You need to start watching CSpan, and see your “Republican” congressmen destroy this country, instead of watching Fox Lies.
      Your blindness to Republican Fraud is the problem.  Until you direct your anger at your party things will stay the same.  The US will transfer our wealth and intellectual property to China, at Wall Street’s Direction, until You demand Republicans Stop.
       
       
       

  • avatar
    mike978

    Dannii – lets get a few facts., First it was around $70 billion in the bailouts of Chrysler and GM. Second some of that money has been paid back with a very high likelihood that in the final analysis the Government will have either made upto $5 billion or is out by at most $10 billion. That depends on the stock price. Which since you sound like a free market kind of guy you should applaud that GM is back on the stock exchange.

    If the bankruptcy was illegal as you and a few others state with absolute certainty then why has no case been taken to court or the Supreme Court. As you say this is a country of laws and there is plenty of legal recourse. The option was complete bankruptcy and bondholders and others (they knew it was risky for years) would get very little if anything.

    With the bailout that will cost the US at most $10 billion you have saved hundreds of thousands of well paid jobs. Also remember the timing the US economy was in recession since December 2007 and losing >500,000 a MONTH. Adding these losses on would not have helped business or consumer sentiment.

    Why do people care about this but not the $600 billion spent on defense EVERY year or the $1 trillion spent on Iraq and Afghanistan. $10 billion is cheapo for what it achieved.
     

  • avatar
    BDB

    One note about American exports/manufacturing:
    The old chestnut that Americans don’t make anything or export anything was raised in this post, and it’s just not true. The US is the world’s #4 exporter, behind China, Germany, and Japan. The US is still the #1 manufacturer, and the share of the world’s goods that we manufacture has been remarkably stable for decades. Since two of the countries above us are export-or-die nations with shrinking domestic markets, and the other is a source of cheap labor with an undervalued currency, that’s not too bad.
    Also FWIW China imports more from the US than any other non-Asian country, yes, even Germany.
     
    http://www.uschina.org/statistics/tradetable.html


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