Exclusive-General Motors targets China’s urban affluent and luxury imports

Exclusive-General Motors targets China’s urban affluent and luxury imports


Sales of its flagship Buick, Cadillac and Chevrolet brands have fallen by a third over the past five years to 1.3 million vehicles a year as consumers buy smart EVs made by domestic companies such as Xpeng , Nio and BYD.

To get the word out about its American brands, GM plans to target wealthy consumers in China’s big cities with luxury imports, executives at the American automaker told Reuters.

Using a new direct-marketing platform called Durant Guild, the company will host invitation-only events to showcase potential products, open “experience centers” in urban centers and possibly host pop-ups at select sites, they said.

“Durant Guild is not a leveling game, but if we do a good job and the products sell well, it will create a big buzz around Cadillac and Chevrolet and help how people see our products and our technology,” GM China head. Julian Blissett told Reuters.

Although he declined to name the cars Durant Guild will sell, he said he is thinking of high-end American models that are not currently available in China, such as an all-electric GMC sedan or a sport utility vehicle (SUV). Chevrolet Tahoe large gasoline SUV or Chevrolet Corvette luxury sports car.

Blissett, a 16-year veteran of the Chinese market, said such “halo cars” would be suitable for urban consumer communities that have become interested in performance sports cars, or SUVs for commuting. song.

“There’s a lot more interest in taking off-road vehicles to explore the wilderness, and that wasn’t the trend five, ten years ago,” Blissett said in an interview.

Durant Guild, named after GM founder William Durant, will be fully owned and operated by GM and will officially launch this month.

To celebrate the launch, GM is hosting a series of invitation-only events, the first of which has been long-awaited in Shanghai on Friday.

CHANGING LUCK

GM hopes that by using a sales and marketing model similar to the one that worked so well for Tesla and Apple in China, it will be able to channel all the energy and excitement that imports are generating into GM’s existing models in China.

“This will positively impact our business and support our growth plans in China,” Blissett said.

GM plans to do this without relying on traditional brick-and-mortar retailers. It was not immediately clear how GM plans to service the vehicles sold by Durant Guild.

Global automakers such as GM, Volkswagen and Toyota, which dominated China’s combustion era, are slowly being left behind by local players in the growing electric vehicle (EV) market.

Foreign brands, including Buick and Chevrolet, have dominated China since the 1990s, typically accounting for 60-70% of passenger car sales in recent years.

In the first eight months of 2022, however, foreign brands took only 52.4% of the market.

In a sign of this development, sales of GM’s Chinese joint venture with SAIC Motor (SAIC-GM) decreased by 4.6% at the end of August compared to the same period last year, while sales of BYD increased by 267%.

For GM, improving the perception of its brands in China is even more important as it prepares to launch a new generation of its smart EVs in the country, starting with the Cadillac Lyriq SUV this year.

Felix Weller, director of the Durant Guild, said GM has identified three new types of consumers it hopes to attract.

First, there are nature lovers who love to shine, take pictures, travel and bike, while staying close to home due to the pandemic that has limited travel options.

Then there are executive VIPs, who are professionally successful and busy, while the third group are young, sporty drivers who take performance cars to the racetrack.

A spokesman later said there were other communities in China that GM also wanted to influence through the Durant Guild, without elaborating.

THERE IS NO CONTROVERSY

It was not immediately clear what specific competitive conditions in the Chinese auto market forced GM to launch a new direct-to-consumer channel to sell specialty vehicles imported from North America.

Asked how his Chinese partner responded to the Durant Guild, Blissett said GM had SAIC’s full support for the idea and mission of the Durant Guild.

“There is no fundamental tension,” he said.

The head of GM China also said there was no response from Chinese dealers who sell Buick, Cadillac and Chevrolet vehicles to GM and SAIC, in part because there was no alternative route.

“It’s a non-essential activity so far, so we’re not taking anything away from anybody. It’s an additional, incremental activity,” Blissett said.

When asked about Durant Guild, a SAIC spokesperson said, “The new platform complements the existing SAIC-GM business. It doesn’t conflict with what we do.”

Weller said Durant Guild would try to move beyond placing its Experience Centers inside malls, as Tesla and other EV startups have done, but this strategy was still being finalized.

He said GM has no plans to use the same direct-to-consumer model for Buick, Chevy and Cadillac vehicles already sold in China — or to take Durant Guild’s model beyond China.

Chee-Kiang Lim, China general manager of Detroit-based consulting firm Urban Science, said a direct sales model like Durant Guild’s is a cost-effective way to sell cars and increase profits — and that GM’s focus on changing the model of consumer life can be. the distinguishing factor.

But he added that GM should not ignore a more important consumer trend, where consumers are increasingly concerned about smart and connected features.

“What Chinese consumers want is to extend their digital life in their car. Increasingly, foreign-branded cars designed and built abroad do not meet these needs,” Lim said.

“If Durant can overcome this bias and provide high-tech special features and seamless integration to China’s digital ecosystems, its chances of success in the Chinese market will be even greater.”