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January 27, 2014

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Meet the man who is putting a new foot on the accelerator at GM China

Matt Tsien stepped into the presidency of General Motors China in January, becoming the first person of Chinese descent to take the top job here.

Origins aside, Tsien faces the serious task of keeping up momentum after record sales last year.

GM’s two joint ventures in China surpassed the 3 million milestone for the first time in 2013, racking up sales of 3.2 million units. However, a growth rate of 11.4 percent lagged the industry average of 14 percent.

“That was largely due to our product releases, whose pace is not necessarily kept at an equal level each year,” said Tsien, a 37-year GM veteran who was in charge of planning and program management for GM China prior to taking the top job. “However, our sales performance last year was still quite satisfactory.”

Looking ahead, GM China is quite optimistic, he said. The Chinese market may grow between 8 percent and 10 percent this year, with planned launches of 17 models of Buick, Chevrolet and Cadillac from Shanghai GM, and Baojun, and Wuling from SAIC-GM-Wuling Automobile. 

Some of the new products will help GM China venture into new niche segments in the SUV market. GM’s rather sparse SUV portfolio in China to day, comprising only the Buick Encore, Chevrolet Captiva and Cadillac SRX, hasn’t helped the company gain much traction in China’s ongoing SUV heyday.

Tsien’s predecessor, Bob Socia, pushed SUVs to the top of GM China’s development agenda before he left. SUVs join expansions in the Cadillac luxury brand and in exports as growth targets for the company. Tsien said he has no plans to alter that strategy.

Despite a 67 percent increase in sales to 50,000 units in China, Cadillac still lags competitors in luxury sales across the country, Tsien admitted. He said brand awareness and market presence need to be elevated.

“Consumers in lower-tier cities may have heard of Cadillac, but they often don’t actually know what kind of cars they are,” he said. “Cadillac needs to step up its branding efforts and dealership network expansion at the same pace as product releases.”

The timing is good for Cadillac to lift its game in the country. The diamond-cut styling of its products has been toned down in recent years to be less edgy, which may attract a wider range of Chinese consumers. More refined interior features are aimed at catering to comfort and convenience inside the cabin.

A new plant for Cadillac production is under construction in Shanghai and expected to open in 2015. There’s also a new research and development facility in the works as part of the Pan Asia Technical Automotive Center (PATAC), a 50-50 venture founded by General Motors and SAIC in 1997.

Bigger role

“PATAC is where GM’s advantage lies in China,” Tsien said. “No other foreign carmaker has this kind of product development cooperation model. When it comes to China-relevant products, PATAC will take a bigger role beyond GM’s global research and development system.”

The technical center formerly served both Shanghai GM and SAIC-GM-Wuling. It will now concentrate on Buick, Chevrolet and Cadillac development because a separate technical center operated by SAIC-GM-Wuling can take care of itself, Tsien said.

PATAC led research and development on the Baojun 630 sedan, which was launched in 2011. Since then, Baojun has lagged the target of one new product a year, on average, through 2015.

Tsien blames the product development cycle, and said the goal will be fulfilled in the end. A new model will be unveiled at the Beijing auto show in April.

Turning to SAIC-GM-Wuling, where Tsien served as executive vice president from 2009 to 2012, he cited some successes in sales to emerging markets.

“But GM China’s main focus is still in China,” he said. “After all, it is the largest auto market in the world.”

Last November, GM split its China business from its consolidated international operations and relocated the headquarters for the latter from Shanghai to Singapore. That led to speculation about what motives lay behind the decision.

“It is not that we are dissatisfied with China or Shanghai,” Tsien said, rebutting the most commonly heard rumor. “It is because consolidated international operations no longer includes our China business. Considering its coverage of Southeast Asia, Australia, Korea and other regional markets, Singapore was a very reasonable choice.”

And making GM China an independent international division gives its greater strength and focus, according to Tsien.  

 




 

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