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GM bets Americans will buy cars made in China
Chicago (AFP) Jan 10, 2016

GM bullish on China despite 'volatile' outlook: chief
Detroit (AFP) Jan 11, 2016 - General Motors is bullish on China despite the current economic slowdown, the US automaker's chief said Sunday on the eve of the Detroit auto show.

"It is a very important market and I think it's going to be more volatile but we still believe over the long term the market has substantial growth," chief executive officer Mary Barra told reporters.

"We have a great partner and we're going to continue to really focus on the Chinese customer to make sure we have the right vehicles across Cadillac, Buick, Chevrolet and our other local brands."

China is GM's largest market and sales there hit a record 3.6 million vehicles in 2015, up five percent from a year earlier. GM's US sales were up five percent at 3.1 million vehicles last year.

In a huge shift, GM will soon begin selling vehicles made in China in the United States.

GM's decision to import the Buick Envision from China -- a first for a major automaker -- has sparked outrage and is expected to become an issue in the 2016 presidential campaign.

"The general strategy we have in the company is to build where we sell," Barra said. "In this case it wasn't economical to tool it here."

Barra -- who was recently tapped as GM's first female chairman -- did not rule out the possibility that the Envision could eventually be built in the United States but said importing it was the only way to round out Buick's US offerings in the near-term.

The largest US automaker sold over 1.2 million Buicks in China last year and only 223,000 in the United States.

While the Envision will help boost those numbers by rounding out Buick's offerings in the fast-growing crossover segment, it is still only expected to reach sales of about 40,000 vehicles in the near-term in the United States.

Barra declined to say whether she was concerned that turmoil on the US stock market could hit demand in the United States, which posted record sales last year.

"What we focus on is performance and what's in our control," she said after introducing a new sports car concept, the Buick Avista, at a reception in Detroit.

"We're going to keep working hard to make sure we put vehicles out, keeping the customer at the center of everything we do, building the brand and serving the customer."

Barra also dismissed rumors that she had met with Fiat Chrysler chief Sergio Marchionne to discuss a merger.

They did meet recently but it was among a group of auto industry executives brought together by US safety regulators which was "totally focused on the agenda of the department of transportation and NHTSA." That stands for National Highway Traffic Safety Administration.

General Motors will be placing a big bet the American public is willing to drive a car built in China when it unveils the Buick Envision on Sunday night.

The largest US automaker is certainly not trying to bring it to market quietly: Buick's latest sport utility vehicle will be introduced at a lavish party on the eve of the Detroit auto show in the hopes of maximizing media coverage.

"We expect it to be a great success," Molly Peck, US marketing director for Buick, told AFP.

"It offers all the features and amenities of a luxury UV. It's high quality, quiet, filled with advance safety technology. The design is gorgeous. The interior execution is outstanding. And it's all at a price point that offers a great a value."

GM's decision to import the Envision from China -- a first for a major automaker -- has sparked outrage and is expected to become an issue in the 2016 presidential campaign.

The United Auto Workers union, which had lobbied to build the Envision in the United States, called the decision to import it from China a "slap in the face" to taxpayers who bailed GM out of bankruptcy in the wake of the financial 2008 crisis.

Republican frontrunner Donald Trump has not yet seized on the issue, but given that he regularly rails against China for stealing American jobs analysts say it's only a matter of time.

"I suspect GM is counting on the product to trump the actual Trump," said Harley Shaiken, a professor at the University of California who specializes in labor issues and the automotive industry.

- 'New era' -

General Motors has come a long way since it first tried importing vehicles from a developing nation -- Mexico -- decades ago and it has systems in place to ensure that the Chinese-built Envision matches both American and global standards, Shaiken said.

"GM is well aware of how a poor reputation in these early vehicles could have much larger impacts down the road," he told AFP.

"This is a major event that opens a new era."

It makes good business sense for GM to import the Envision from China: it sold over 1.2 million Buicks in China last year and only 223,000 in the United States.

While the Envision will help boost those numbers by rounding out Buick's offerings in the fast-growing crossover segment, it is still only expected to reach sales of about 40,000 vehicles in the near-term.

"GM's North America plants are just running full-out: there isn't a logical place to put that car," said Stephanie Brinley, an analyst with IHS Automotive.

"That doesn't mean that all Buicks will now and forever be built from China, or that General Motors will as a general strategy be bringing vehicles in from China. What it means is that GM has a global footprint and they will use it."

Most consumers probably won't even realize that the Envision was built in China, said Jessica Caldwell, an analyst with automotive website

"There may be some balking at first if people want to make an issue of it but I imagine in the long run it won't be a deal breaker for a lot of people," she told AFP.

"If the quality is good, I don't know if people are necessarily going to care."

One reason why it's taken so long for a major automaker to import vehicles from China is because they've been so busy trying to satisfy demand in that fast-growing market, said Jack Nerad, an analyst with Kelly Blue Book.

"I don't think we're going to suddenly see a flood of Chinese-built vehicles but I think we will see a few more," Nerad said in a telephone interview.

"A Chinese brand is a bigger reach than something with a very familiar label like a Buick label. I don't know that this market is crying out for new brands."


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