Cash-strapped GM sells passenger car brands to SAIC to focus on trucks and SUVs
and:
SAIC builds passenger-car brand portfolio with Wuling, Baojun, Chevrolet, Roewe, MG, Buick and Cadillac
You can almost think of MG as Pontiac and Roewe as Oldsmobile … With the decimation of the GM line-up globally, and the segments they no longer field (e.g. C-segment cars in many markets), will they even have the investment needed to sustain the car brands?
I know they are saying this was all necessary to fund the electrification of the range and autonomous tech, but isn’t this the same company that nixed the EV1 and failed to make the Volt a Prius-beater?
The Chinese state wasn’t about creating “Chinese Leyland” when they forced SAIC and NAC to merge. They had much grander plans.
The 2009 Chevrolet Caprice SS, sold in the Middle East but made in Australia.
I came across a 2017 interview with former Holden chairman Peter Hanenberger, who was in charge when the company had its last number-one sales’ position in Australia. His words are prescient and everything he said then still applies today.
He spent over four and a half decades at GM so he knows the company better than most. Since he departed in 2003 he had seven successors at the time of the interview; and I believe there have been a couple more since.
A few interesting quotes.
‘It’s [now] a very short-sighted company.’
It feels like it. The sort of retreating it’s done, the dismantling of global operations, and the failure to see how global platforms can achieve economies of scale is something only a company beholden to quarterly stock price results will do. And it doesn’t help its longevity.
Even Holden, which looked like it was going to simply depart the passenger-car sector at the end of last year before a full withdrawal now, tells us that there doesn’t appear to be a long-term plan in place that the US management is committed to. Not long ago they were going on about the two dozen models they planned to launch to field a competitive line-up.
‘For me General Motors was a global player. Today General Motors is shrinking to an American company with no foresight, which is in very bad shape, which has missed the market.’
Remember Hanenberger said this in 2017, when it still had presences in many Asian countries. In 2020 it very much looks like GM will be in the Americas (where it still fields reasonably complete line-ups, although God knows if they have anything in the pipeline to replace the existing models) and China. Russia, India, Australia, New Zealand and Thailand are gone or going, and western Europe went in 2017 before the interview.
‘Maybe it fits into the vision of Trump; America first. But how the world is going to work also in the future is not because of America first and America only. It’s global. I think there will be no GM in the near-future.’
Everyone else is desperate to do tie-ups while GM retreats. I think GM will still be around but it’ll be a Chinese firm.
‘I couldn’t give a shit what they thought in America.’
I don’t mean this as an anti-American quote, but I see it as a dig against bean counters (whatever their nationality) fixated on the short term and not motorheads who know their sector well.
‘For me Holden didn’t have enough product, and the second one [priority] was I wanted to get these cars they had into export. For me it was very clear the products they had could be exported and they should go on to export.’
You saw the failure of this in the early 2010s when Holden failed to keep its Middle Eastern deals, and the US models returned. It could have been so different, though I realize GM was very cash-strapped when they needed the US taxpayer to bail them out.
Bruce Newton, who wrote the piece, says that the Middle East was worth up to 40,000 units per annum, with A$10,000 profit per car. It cost Holden A$20 million to develop them for left-hand drive. I’d have held on to that sort of opportunity for dear life.
‘There was nothing going on that was creative towards the future of Holden as in Australia, New Zealand and toward the export market. They just neglected this whole thing.’
That was Hanenberger when he visited his old workplace in 2006. With product development cycles the way they are, it’s no wonder they were so ill placed when the Middle Eastern markets lost interest in the VE Commodore and WM Caprice (as the Chevrolet Lumina and Caprice), and China in the Buick Park Avenue.
It’s an interesting interview and perhaps one of the best post mortems for Holden, even if it wasn’t intended to be so three years ago.
The Chinese-market Buick Enclave became Autocade’s 4,000th model today. It wasn’t planned: in fact, I had readied a photograph of the Hyundai Tiburon (RD), expecting that would be the 4,000th. But, as happens with this site, you spot something, and you want that clarified. I haven’t been methodical about Autocade, ever—it has always been about what took my fancy and whether my reference books on the topic were around. (After the move, a few still aren’t, so fans of smog-era US cars may have some waiting before they see those increase in numbers again.)
Just as I do with each millionth page view, I thought I’d see how the entry numbers had progressed:
December 2009: 1,000 models (21 months to first 1,000)
December 2012: 2,000 models (three years to second 1,000)
December 2014: 3,000 models (two years to third 1,000)
January 2020: 4,000 models (six years and one month to fourth 1,000)
In other words, these last 1,000 took ages, and I suspect it’s a mixture of busy-ness on other ventures and the fact that a lot of modern cars that get entered aren’t that inspiring.
When many entries of new models into Autocade are of SUVs, especially Chinese ones that have little to distinguish themselves, then it’s not as fun as adding those models that you’ve had some connection with from your youth. The first 1,000 were easy: I remembered many of the details (cubic capacities and prices, for instance—I am that much of an anorak when it came to stuff from my childhood) and while I still checked with books, they didn’t take that long to write. But how many of us care about the difference between the Honda Pilot and Passport, or the links between the Beijing X3, Changhe Q35, BAIC X35 and Senova Zhixing anyway?
I imagine that there’s more editing that goes on today, too. When a current model gets entered, you just put the start of production and ‘to date’. But there’s no guarantee we’ll revisit that page when the car ends production; and often there’s no announcement of the cessation anyway. Naturally with more pages on the database, the more time you’ll spend editing and correcting existing content than creating brand-new stuff. China’s massive boom in the late 2000s and most of the 2010s meant a plethora of models got entered, and with the market the way it is there, cannibalization of your own model lines hasn’t struck some car makers as an issue yet.
There’s also the issue of translation: you want to go to a Chinese resource when writing about Chinese cars, and my literacy hasn’t really kept up with my age.
A middle-aged man uses, in part, nostalgia to make sense of the car world—I buy Octane and Classic and Sportscar more than Autocar and Car these days—and while it’s easy to understand Kas, Fiestas, Focuses and Mondeos, it’s not as second-nature to utter EcoSport, Puma, Escape and Mustang Mach-E. It is no surprise to see Mercedes-Benz stick with its A, B, C, E and S pecking order, even for its SUVs (prepend GL). The next generation of motorhead will have no such issue: they’re used to these big line-ups and where everything sits.
I’ll keep building, and there is plenty of exotica that hasn’t been entered. Perhaps between those and the Chinese crossovers, it can remain interesting.
I’m not so sure that GM going into talks to sell Opel and Vauxhall to PSA (Peugeot–Citroën) is that big a surprise.
We obviously hold a lot of nostalgia for these brands, and it’s only right that we perceive GM as selling its family jewels. Opel has made some great cars over the years, and Buick in China and the US, Vauxhall in the UK, and Holden in Australia rely on this division to provide it with product.
But it wasn’t long ago that I said I foresaw the next Holden Commodore being a four-door booted model based on a Chinese Buick Regal that’s on the same platform. While I’ve been proved wrong with scoop photos and inside information from journalists in the immediate term, longer-term this doesn’t look so far-fetched, in a future where Peugeot owns Opel–Vauxhall and GM has no choice but to consider Chinese sourcing seriously.
Therefore, GM isn’t thinking that it’s selling off the family jewels, at least the GM where Chinese partner SAIC is overwhelmingly calling the shots.
What they are thinking is this: ‘We should be able to develop the whole lot in China.’ They weren’t nostalgic over Holden, and they won’t be thrilled with the losses at Opel. It’s willing to sacrifice it to make its own position stronger. We’ve already seen that SAIC has called it quits when it comes to British assembly at Longbridge—that’s now all done back in China.
There’s been such a massive technology transfer from the US to China over the last few years that Europe is seen as surplus by the folks in Shanghai. They have all the platforms on which they can make products globally. They may even, rightly or wrongly, think that the remaining brands can get them into Europe, even if GM had pulled its Korean-made Chevrolets out of there.
Holden can be used to westernize the product and the Australians have shown they can do it well.
I’m not saying I agree with this, as a long-time Opel fan. I was looking forward to the new Commodores coming out of Rüsselsheim. The car looks the business, it’s roughly the size of the recently deleted Ford Falcon (therefore, I’m not sure why people are so upset about its size), and the majority of buyers don’t even know which set of wheels the power’s going to. I’ve got an Astra K coming in a few months at Lucire.
What you’re going to see is GM basically being a Shanghai-run firm with China supplying global markets and the US operations kept going for their brand cachet.
In the meantime, a hypothetical PSA-run Opel will continue with the existing plans till the end of these models’ life cycles, then China will become the manufacturing hub for numerous markets.
SAIC already makes a load of Cadillacs, Buicks and Chevrolets for the domestic market, and they’ll want to pump them out more widely.
They’ve also shown that they can take new GM platforms and turn them into Roewes—or old GM platforms and turn them into Baojuns.
PSA, meanwhile, with 14 per cent controlled by Chinese firm Dongfeng, will pursue a strategy of streamlining platforms and be focused more on Europe. It could pay off as cross-town rival Renault has done well with Nissan, Mitsubishi, Samsung, Dacia and AvtoVAZ, but it won’t nearly be as secure. The two French groups have been obsessed with one another for as long as I can remember, for years spending more time rivalling each other than actually coming up with what customers wanted.
Dongfeng may have to cough up more lolly and it could become a larger shareholder than the Peugeot family or the French government. But will it have the sort of geographical coverage that Renault has?
That’ll be what PSA will be asking itself, knowing that it’s reasonably strong in China—but also realizing that it hasn’t been clever at creating models that can be sold globally (the current Citroën C6, DS 5LS and the DS 6 among them, sold exclusively in China). Nevertheless, there are savings to be had, though the most obvious fear is that Opel and Vauxhall will go the way of Panhard and Talbot, brands that fell into either Peugeot or Citroën’s hands over the years and become defunct at the expense of the parent companies’. Is there a desire to extend the group’s brand portfolio beyond Peugeot, Citroën, DS, the various Dongfeng lines, and the ex-Hindustan Ambassador?
The official statement is non-committal enough and gives nothing away: ‘PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA.
‘There can be no assurance that an agreement will be reached.’
In any case, we always said that SAIC was playing a long game. MG was a toe in the water. GM is the real deal.
Controlling GM means they can do as they please, and what’s good for China is good for General Motors.
