China will overtake both America and Europe to become General Motors most important market by the end of this year, says former Vauxhall boss Kevin Wale, who now heads GMs Chinese operation.
This will have an impact on the cars that GM develops for the United States and Europe in the future, says Lowell Paddock, vice-president in charge of planning and programme management for GM International Operations. The needs of Chinese buyers, as well as those in the other booming nations Brazil, India and Russia will have to be given much greater prominence.
US and Europe losing prominence
The United States and Europe stopped leading in influence three years ago, says Wale. By 2025 there will be 200 cities in China with a population of more than a million compared with only nine in the US. Do you know how many there in the whole of Europe? Just 35.
GM, in partnership with Shanghai Automotive (SAIC), is the Chinese market leader with a 12.6% share. GM and SAIC will sell nearly 2.4 million cars in China this year compared with a million two years ago and a mere 6000 at the start of this decade. That puts China fractionally ahead of the US in importance to GM, and way in front of Europe, where around 1.2 million Vauxhalls, Opels and Chevrolets will be sold.
Overall, the Chinese will buy 17 million cars in 2010 25% more than in 2009. Even in good economic conditions the figures for the US and Europe are unlikely to better 15 million and 13 million respectively.
The big gorilla in the room is China, says Wale, and there is still a lot more room for economic growth. Favourable Chinese Government policies, a burgeoning economy and the increasing affluence of Chinese families are the major factors fuelling growth, he adds.
Planning chief Paddock says that even though Brazil, China, India and Russia offer the greatest opportunities for expansion, GM will not follow the example of Nissan with the new Micra in developing cars for emerging nations and then adapting them for Europe.
We wont take a platform developed for an emerging market to a sophisticated market, he says. The alternative, he adds, is to develop smarter platforms from the outset.
China to 'lead' electric development
Paddock also expects China to lead the development of electric vehicles in the next few years, with massive encouragement from the Government. China sees Europe as having driven the development of the internal combustion engine. They want to drive EVs, he says.
There are huge incentives. This is a top priority for the central government, which is taking a long-term view, and we will have a wide variety (of pure EVs) to satisfy this.