BaoJun: China's Trojan Export Horse. By GM
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?
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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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