Tuesday, February 17, 2009

Slim GM

Some time ago I proposed on this blog that the US auto makers emulate the Japanese in trimming their brands to just a consumer brand (i.e. Toyota) and a luxury brand (i.e. Lexus). It looks like GM is proposing just such a plan:

The plan will outline in considerable detail, over as many as 900 pages, how G.M. will further cut its work force, shutter more factories in North America and reduce its lineup of brands to just four, from eight, according to executives knowledgeable about its contents. The remaining core brands will be Chevrolet, Cadillac, GMC and Buick.
Holding on to GMC makes sense, since it's basically a commercial truck division of the company, but holding on to Buick, at first sight doesn't seem to make sense. There's the old joke about Oldsmobuicks being, at best, a nostalgic throwback to a 1950's America long since gone. Your dad remembers going for a Sunday drive in his dad's Buick, but even he never actually owned one (his first car, he tells you fondly, was a '67 Mustang). Buicks are basically retiree vehicles for folks whose retirement account isn't generous enough to justify a Cadillac. So why hold on to Buick? Well, as it happens, Buicks are huge in China, the world's largest emerging market.
Buick’s sizzling sales have driven General Motors — even as it closes plants and lays off workers at home — to the top of the pack in China, the world’s fastest-growing automobile market. GM sold 665,000 cars and trucks in China last year. For now, only 1 in 100 Chinese own a car, compared to 9 in 10 in the United States. But the Chinese expect 130 million vehicles to be sold by 2020.

The Buick has always had a bit of allure here. The last emperor was the proud owner of two Buicks, but now, the Buick is making a new generation of Chinese feel at least like kings of the road.
Maybe there's just something about China in the 2000's that resembles America in the 1950's... hopefully only the good parts.

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