SAIC/GM Take First Steps Towards A Worldwide Partnership

Bertel Schmitt
by Bertel Schmitt

In its darkest hour, GM handed China-partner SAIC half of GM’s India business in return for some cash. Recently, GM injected cash (which it has again) into the joint venture, which resulted in GM owning 91 percent of the India business, and SAIC nine. That was widely lauded as GM regaining its independence. Some even said GM and SAIC don’t get along anymore. The opposite is true: GM and SAIC are expected to march hand in hand all over Southeast Asia. SAIC’s influence on GM is spreading.

GM China chief Bob Socia told Reuters that SAIC “will continue to help GM develop ‘value cars’ for India and other emerging markets” and that GM and SAIC might combine their respective strengths to crack emerging market demand for no-frills cars in all of Southeast Asia.

“The whole ASEAN arena is ripe for that same sort of conversation,” Socia said.

“I wouldn’t read too much into the equity share thing; we’re working very well and we will continue to work very well with one another,” said Socia. While GM has resumed operative control of India, SAIC still is “very active in strategic issues of the organization.”

Apart from China and India, Southeast Asia is one of the markets with the most future. It is also where GM had a hard time. Japanese brands own most of Southeast Asia. In Indonesia, Japanese brands control well over 90 percent of the market. GM wants to go on the counter-offensive with low cost cars out of the SAIC stable.

GM is the first and so far only car company that unites with a Chinese joint venture partner to develop other growth markets. A Chinese joint venture slowly develops into a worldwide partnership.

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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Dan1malk Dan1malk on Dec 06, 2012

    Wasn't the initial purpose of the joint venture to make cars together for "India and other emerging markets?" So, isn't that a "worldwide partnership" from the beginning? Or did we expect these cars to only be sold in India, when other countries have similar needs and demands of their automobiles? Sounds like a good business move to me. If I (American) was going to challenge a Russian chef in an international cook-off taking place in Russia, I would probably enlist all the Russian help I could get.

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    • RobertRyan RobertRyan on Dec 06, 2012

      @APaGttH "there with core GM brands (e.g. Chevrolet, Buick, Cadillac)" Actually "Chevrolet" is GM Daewoo. "Buick" is mainly an Opel derived small car. Cadillac is struggling against European Luxury brands in China. SAIC will have a hard time in South East Asia. The Chinese are a bit on the nose.