Shanghai General

Motors: The Rise of a

Late-Comer
Hanindita Guritna 29114713
Michelle Monica Alexandra 29114727
Edwin Lumenta 29114760
Eska Anisa NFA 29114777
Rini Amelia -29114827

History of Shanghai General Motors

1922
Moved GM
Manila branch
to Shanghai

1998
Start
producing
Buicks

1997
GM signed
US$1.6 billion
contract with
SAIC

2002
Launching of
new Buick G
sedan model

1999
Signed MOU
with 5
Chinese
universities

2004
Launching of
Buick Excelle
HRV
hatchback
and Buick
Royaum
premium
sedan

3. The partnership between GM and SAIC can be

considered a learning alliance. Discuss the
balance of power between the two parties.

SGM and SAIC Condition prior to

Joint Ventures
SGM

Could supply components and assembly 13,000 vehicles

3,500 employees in China

Currently has 3 joint ventures

SAIC

One of 3 biggest automobile manufacturers in China

65,000 employees

Currently has 33 joint ventures

Annual production of 600,000 cars

Advantage from the Joint Venture

SGM

Granted permission to establish its own distribution and sales

network in China

Could reproduce supply chain similar to the one in the US

Could apply auto financing business license by forming JV

with a subsidiary of SAIC

SAIC

Absorbed imported technology from GM

Could develop manufacturing competencies

Acquire competitive advantage and trust from Chinese

government

Balance of Power Between SGM and

SAIC
From SGM and SAIC
partnership, they made
Pan Asia Technical
Automotive Center
(PATAC), which was
equipped with advanced
equipment. They reengineer the Buick Regal,
which was introduced in
December 2002 under
GMs' name, and quickly

5. Perform a SWOT analysis of GM in 2004, a year that

it has achieved strong growth in market share and
profitability. What are the success factors that
contribute to GMs rapid growth? What are the
threats and opportunities faces by SGM in the
competitive automobile market?

Shanghai General Motors Situation

in 2004

SGMs SWOT Analysis

Strength

Strong brand recognition for luxury cars under Buick

Has its own distribution and sales network in China

Early entrance to China market

Extensive GM product lines that targets different segments

Joint ventures with SAIC

Products tailored to Chinese market requirements

Weakness

Higher price compared to local automotive market

Some models mostly still manufactured in the US

SGMs SWOT Analysis (cont.)

Opportunities

Growing economy car market

Increase in size of the middle class in China

New automotive policy in 2004 for autonomy in sales and

distribution (Exhibit 7)

Threats

Chinese government lowered import tariffs

Higher influx of imported cars for high end segment

Maturation of Chinese car manufacturers for middle and low

end segment