Manufacturing News

In a bankruptcy, GM would protect Buick brand, China unit

General Motors' profitable Chinese unit, and the Buick brand it relies on, would be protected if the automaker files for bankruptcy.

General Motors' profitable Chinese unit, and the Buick brand it relies on, would be protected if the automaker files for bankruptcy, a senior executive here says.
And Buicks increasingly will be tailored to Chinese tastes, with those changes feeding back to the U.S. market.
Terry Johnsson says Shanghai General Motors Corp., where he is vice president in charge of sales, service and marketing, won't be at risk if GM files for Chapter 11 reorganization in the United States.
"We don't think it will be affected at all," Johnsson told Automotive News on the sidelines of the Shanghai motor show in late April. "Any scenario for transforming the company is always going to treasure those parts of the business that are generating cash."
'Very protected'
Johnsson said that all the restructuring plans for GM that he has seen keep programs and product launches "very protected" in China, he says. Both Washington and Detroit see China as key to any GM comeback, he says. "You've got to play in China."
GM's China operations are a rare bright spot for the troubled carmaker.
In March, GM booked a 24.6 percent sales increase in China to a monthly record of 137,004 units.
Shanghai GM, a partnership with Shanghai Automotive Industry Corp., is profitable and self-funding, Johnsson says. GM sees its sales exceeding 500,000 this year, up from 485,000 last year. Market share should climb above 8 percent, from 7.7 percent in 2008, he says. Some analysts are predicting that China, including its large commercial-vehicle sector, will eclipse the United States as the world's biggest car market this year.
Buick — which is on track to sell more cars in China than in North America again this year, as it did in 2008 and 2007 — will be driving GM's gains there. It is a core brand that must be preserved in any restructuring, even as GM tries to shed such names as Saturn, Saab and Hummer, Johnsson says.
Looking ahead, expect Buick to become more of a Chinese brand.
Traditionally, its lineup in China was dictated by decisions and developments stateside. But in the future, decisions made in China to tailor cars to local tastes will feed back to the United States.
China first
Applications of new technology demanded in China could surface first in Chinese Buicks and then be introduced to North America, Johnsson says. That includes things such as smaller-displacement engines, turbochargers, electric drivetrains or infotainment systems.
"That's an area where our volume and our critical mass help enable perhaps future powertrain entries into the United States," Johnsson says. As China gets richer, its drivers increasingly will shape the global auto industry and the features we see in cars, he says.
"In terms of the future," he says, "clearly China is the prize."

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