An article in the April 26th issue of The Economist, “Rising in the East,” contrasts General Motors’ tough times in the US market with its surprising success in China. Through partnerships with Chinese automakers Wuling and Shanghai Automotive Industry Corporation, GM has taken advantage of China’s extremely low labor costs (about $100 per vehicle produced by the SGMW joint-venture) as well as PATAC, a joint design center in Shanghai, the Chinese government’s help, and the world’s fastest-growing and second-largest auto market, to assemble thousands of cars cheaply, to make Buick China’s top car brand, and to succeed where its archrival Toyota has not (yet). Of course, the challenge to GM comes from the Chinese automakers themselves, who have begun to introduce their own successful models: “It will be some time before SAIC's own brands are a match for Buick, but through its Chinese partnership GM is “supplying bullets to the enemy,” says Joe Phillippi, an analyst at AutoTrends Consulting in New Jersey.”
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