General Motors: Global Marketing Strategy or Not?

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Image: Chevrolet vehicle in China

I believe the general consensus today in the U.S. about GM is not nearly as positive as it was maybe 20-30 years ago.  Today, at least when I think of GM, I think of a vehicle that is not as reliable as its Japanese counterparts.  More specifically, in regards to the Buick brand of GM, I think that most of us would agree that this is a model that you must be at least 65 years or older to drive.  The Buick does not appeal to the younger generation at all.  In fact, I believe both of my late grandfathers drove GMs; one had a Cadillac sedan and the other a “boat” of a Buick.  I can’t imagine yuppy guys hanging out at the bar after work, having some Ketel One straight out of the glass (have you seen that commercial?) discussing how cool they are in their new Buick Regals.  These scenarios are more reserved for BMW and Mercedes-Benz vehicle owners.

On one of my many trips to China, I noticed that almost every Expat and big businessman that I came in contact with owned a Buick. These are the type of guys that have personal drivers and are very well-off in China. I found myself snickering a bit under my breath when I saw the President of my Company’s China Operations get into his Buick after our dinner meeting.  Why is it that GM and its seemingly dying models are doing so well in China?  Is GM employing the same marketing strategy there that it is in the United States?  If so, why is it working in China and not here in the U.S.?

After some research, I noted that General Motors actually sold more cars and trucks in China last year than it did in the U.S., for the first time in the company’s 102-year history.  Further, GM expects its sales growth to continue, and industry analysts say it may dethrone Toyota as the global sales leader this year.  Unbelievable right?  From our standpoint in the U.S., would you ever have thought that to be the case? One of the reasons for this success might be the localized marketing strategy that GM has by offering a much different product line in China than in the U.S.  For example, although in 2011 GM offered 39 different models in China versus 46 different models in the U.S., of those models GM China offered 10 Buicks versus only 4 Buicks in the U.S.  Could GM’s strategy to focus more on the Buick in China versus the U.S. have been a main success driver?

Finally, it appears GM is focusing its strategy on inland cities. One of its less expensive models, the Baojun 630, priced at between 62,800 and 73,800 yuan ($9,758-11,467), will target consumers in China’s second- and third-tier cities initially, GM said in
a statement.  GM followed up with stating that this particular new model will also be available in first-tier and fourth-tier cities gradually, it adding over 120 sales outlets for Baojun are now opening for business nationwide.While continuing to reap profits from pricier Buick and Cadillac models, GM has also been stepping up its presence in smaller, inland cities which are quickly replacing coastal cities as the major industry growth driver.  This strategy seems radically different from the U.S. strategy whereby GM has a huge presence in Detroit and has seemingly focused on larger areas with ads featuring Tiger Woods and the “imported from Detroit” marketing label.  Should GM consider “importing” its strategy from China for use in the U.S. instead?  I think some could argue that it should…

Sources:

1. http://www.huffingtonpost.com/2011/01/24/gm-sales-china_n_812934.html

2. http://media.gm.com/media/cn/en/vehicles.brand_GM.html

3. http://media.gm.com/media/us/en/gm/vehicles.html

4. http://www.reuters.com/article/2011/08/09/us-gm-china-idUSTRE77818R20110809

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