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Shanghai Suprise: GM
777Date: Saturday, 30 Oct 2010, 13.42 | Message # 1
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When I was over in Shanghai, I was lucky enough to meet with Lowell Paddock, GM's vice president for planning and program management. I met Paddock -- who's been working in Asia for the past six years -- and his colleague Michael Albano, director of product and technology communications, for lunch at GM's towering and shiny-new headquarters in the Pudong region of Shanghai. Over some quite good steamed dumplings, we talked cars, GM's goals and strategy in the region, and the Chinese people's affinity for Buick.

Paddock, a Massachusetts native like myself -- Albano is from not far away, in New York -- was raised with a love for cars from his mother, who had developed a passion for planes and vehicles from her time in the armed services. Paddock, in fact, first worked as an automotive journalist ("way back," he says) before moving into a position where he helps shape decisions, rather than simply reporting on them.

My first questions were about the success of Buick in the country. (From the moment I stepped into the city, that brand was to be seen everywhere on the city's twisting, soaring highways.) Paddock and Albano acknowledged the badge's visibility, but were also quick to point out that you can't generalize China based on Shanghai (something I heard repeatedly and in differing contexts throughout my trip). Buick is helped out in a large way by GM's partnership with Shanghai Automotive Corporation (SAIC), they said, and in other cities different brands (Toyota, say, or Audi) may be more visible thanks to their regional partnerships. However -- and this I did not know -- there's a historical significance to Buick's status in China. Namely, Sun Yat-Sen, Chinese revolutionary and considered the father of modern China, took his first car ride in a Buick, and later bought two of them in the early part of the 19th century.

I asked Paddock if that type of history made it hard for other GM brands -- specifically, Cadillac -- to stand out.

"I don't think Buick's success hurts Cadillac. They're intended for different markets, obviously, and it's really about getting the product itself right. When we get the product right, we have great success."

And what do Chinese consumers look for? Albano mentioned that fit and finish, as well as attention to detail, are big in Chinese buyer's minds. Paddock said that the customer base in China is "very well-informed" and that a sense of value for a product -- though certainly not in the sense that vehicles need be minimal or lack amenities -- is quite important. Also, both men noted that a large back seat -- larger than expected in the U.S. or Europe -- is a common feature in Chinese cars, since during the early stages of the mass adoption of the automobile most car owners were wealthy enough, and preferred, to be chauffeured.

When I asked GM's biggest challenge in the region over the next 10 years -- a lifetime in a city that changes as rapidly as Shanghai, though that's not necessarily true of the rest of the country -- Paddock thought for a moment.

"Competition will be our biggest challenge. There's an incredible proliferation of local brands, and we'll need to work closely with our regional partners, as we do now, to make sure we understand and execute the types of products that will succeed where they're intended to succeed." He went on to mention the expansion of the company's export base, with a particular view towards India, as key to long-term growth.

As for current successes, both Paddock and Albano spoke highly of their partnership with SAIC, and cited that relationship as a key factor. Albano told me that the Chevy Cruze (there's one on display in the lobby of GM's Shanghai headquarters) is selling 15,000 units per month, and was the vehicle quickest to sell 100,000 units in China in GM's history there. The small-car Chevy Spark, which will come at the end of the year, is also expected to be a big seller.

There's also a tremendous market for vans -- so much so that China is the only market in which a Buick-made van is still available -- and on my way out Paddock took a moment to show me, displayed in the lobby, a GM-made van made specifically for the Chinese market, in which the attention to detail was apparent. Easy sliding seats for customizable layout, a spartan but not unattractive interior (making it easy to get in and out of, or to load things into and out of), and plenty of leg and headroom made it easy to see why it would be a hit as a utilitarian and multi-purpose people-and-goods hauler.

Paddock also espoused the merits of the Cruze as a truly global vehicle, moving almost unchanged from market to market and finding success everywhere (and from the sheetmetal it's no wonder it's such a hit -- it's a great-looking car) and gave me a quick tour of the China-only Cadillac SLS. He's a man who certainly knows cars, but what's best is his passion for them, which is readily apparent when you speak with him. As we shook hands before I headed off to check out the SAIC-GM pavilion at the World Expo, I was reminded of something he had said, almost in passing, during our interview: "No one in this building takes any of our successes for granted."

After talking with Paddock and Albano, and hearing the passion they have for what they do, I'm inclined to believe it.


 
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