Ford and GM battle for sales in China

Any trip to Walmart reveals the unavoidable: Chinese products are taking over our homes. But the Chinese thirst for American-badged cars is similarly ??vast. American automakers are poised to sell more than 2.5 million vehicles in China this year. With U.S. and European car markets stagnating, sales to the Chinese are essential to the U.S. auto industry’s health.

Indeed, through the first half of this year, GM has sold more cars in China (1.2 million vehicles) than in the U.S. (1.08 million). And GM expects to sell more than three million cars there annually within five years. But Ford isn’t faring as well in China—GM outsells the blue-oval brand four to one. So what is GM doing right in China, and what is Ford doing wrong? And what can we expect in the future?

Buoyed by Buick

Managing the myriad brands under the GM umbrella has not been one of the General’s strong points in past decades, but its operations in China run the Chevrolet, Buick, and Cadillac brands astonishingly well and are about to get a fourth sales channel, the lower-priced Baojun.

Buick’s success in China helped to save the brand from the fates of ??Pontiac, Oldsmobile, and Saturn. In 2009, China accounted for 450,000 Buick sales; in the U.S. last year, Buick sales barely broke 100,000. The average Buick customer in China is in his mid-30s—about half the age of his U.S.-market counterpart. Buick is the brand of choice for young, successful entrepreneurs and enjoys a cachet born of the big car’s popularity among the wealthy in 1930s China. While it doesn’t try to compete with the premium German carmakers, Buick is clearly superior to the typical Chinese mass-market brands. Interestingly, since the ??latest LaCrosse, Buick design has been driven by ??the tastes of Chinese buyers.

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