GM, Too Scared To Go To Emerging Markets Alone, Picks Two Even Scarier Escorts
GM’s CEO Dan Akerson gave an interview to Norihiko Shirouzu, one of the best men in Reuters’ impressive stable of automotive writers. Akerson disclosed two very scary pieces of information:
- GM hinged most of its emerging markets strategy on its Chinese JV partner SAIC
- GM will hinge most of its emerging markets strategy on SAIC and PSA
In a world of stagnating first world markets, emerging markets are the placer to be for growth and volume. Already, more cars are sold and bought in emerging markets than in the U.S., Canada, Japan, and Western Europe. A well-managed car company must have a solid emerging markets strategy, or it will die.
Apparently, GM wanted someone to hold its hands when venturing into these strange lands. Says Reuters:
“Top executives of the global automaker had begun indicating about three years ago that it would use SAIC, which produces affordable no-frills cars in joint ventures with GM, as its preferred partner to expand into emerging markets worldwide.”
Scary. Not only does GM want to share the pie in China, where it has to. It also wants to share in other markets, where is does not need to. Shared growth is only half the growth. And if the growth comes from SAIC’s “affordable no-frill cars,” then the money will end up at SAIC. What’s even scarier: GM helps China’s largest automaker establish itself in the most interesting world markets.
Can it get any scarier? Yes, it does. Says Reuters:
“But in recent months, GM has been looking to also partner with France’s PSA Peugeot Citroen, not only in Europe where the U.S. auto maker is trying to fix its troubled Opel unit but also in Russia and Latin America.”
Already, the GM-SAIC joint venture is selling Chevy Sail compacts to South American, along with Chinese-made Wuling microvans, nearly always using GM’s dealer networks. Now it wants to share its future with French patient PSA.
According to Reuters, Akerson “is now trying to divide the emerging world between its two partners. SAIC in Asian markets outside China and PSA in Russia and Latin America.”
Imagine: You walk through dark alleys in foreign lands. You are accompanied by one guy what wants you dead, sooner or later, and another guy who will be dead, sooner or later. Very, very scary. GM does not new partners. It needs a new boss.
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why cant PSA go bankrupt, get bailed out, cut costs and be profitable on lower volume the way GM is now compared to pre bankruptcy? I admit that I would hate to see Citroen die and thus would support any French bailout. Besides somebody is bound to point out that in EU banks were being bailed out left and right and EU commission didn't complain so why not bail out a big auto maker.
GM seems to be doing a great job of mentoring its future competitors... One wonders how much longer the junior partner in the JV will remain the junior, once they have figured out how to not only build, but market cars outside of their home markets. The writing is already on the wall with SAIC, especially when you look at some of their higher end offerings, Roewe anyone? Tell me this thing won't be competing with a Buick in ten years' time. http://www.roewe.com.cn/roewe950/ It is all the more ironic that many of the current Roewe models actually share common platforms and powertrains with mid-size GM vehicles currently on sale in the US. A parallel is the relationship between Hyundai and Mitsubishi. Throughout the 80s and 90s, the former built obsolete Mitsubishi models in Korea under its own brand. Though Mitsubishi still owns a 25% interest in Hyundai Motors, the Koreans have really emerged as the more successful car maker in recent years. I can certainly see a similar thing happening with GM's joint venture partners around the world.