GM taps the 'dazzling speed' of opportunities, innovation
From a luxury item owned by the fortunate few to a mainstream must-have owned by millions, the automobile in China has undergone rapid transformation since the nation opened its doors to the outside world and began creating a market economy 40 years ago.
US-based General Motors has been part of that evolution. The company’s history in China actually goes back more than 90 years.
In 1978, most of the vehicles on the roadways were trucks and the automobiles of high-ranking officials. Today, everyday Chinese consumers face an array of choices and prices in cars. The change is something few could have imagined back then.
Matt Tsien, president of General Motors China, recently shared his views with Shanghai Daily about the opportunities and changes that have redefined the industry in the past four decades.
Tsien has been with GM for over 40 years. He has headed up China operations since January 2014. Based in Shanghai, he oversees the operations of GM’s 10 joint ventures in China.
Q: What do you think is the most impressive change in China in the past 40 years?
A: When I first came to China in 1995, it was a land of bicycles. Only a million vehicles were produced every year here, and the majority were commercial vehicles. However, the country was moving fast. Even back then, every time I returned to Shanghai, I would marvel at the increasingly vibrant traffic and the expanding city with new elevated roads and bridges.
The country was moving at what we now call “China speed.” It was this can-do spirit that transformed China’s automotive industry into a global powerhouse within decades. Today, China is not only the world’s largest vehicle market by sales but also an exciting global source of innovation and a testing ground for that innovation.
GM has likewise been moving at “China speed” for the past two decades. We are proud of having witnessed, participated in and benefited from the development opportunities brought by China’s reform and opening up. By integrating our global resources with the local expertise of our partners, we have established a strong presence in China.
Q: How do you relate the reform and opening up processes to China’s growth?
A: Reform and opening up marked one of the biggest historical turning points for modern China. From embracing the market economy to joining the World Trade Organization, from establishing Shenzhen Special Economic Zone to piloting free trade zones, the government has unleashed the power of economic development. It has made this country an important participant on the global stage across industries, directly benefiting the Chinese people.
The reform and opening up attracted foreign companies to China, a market with tremendous potential and opportunities. When SAIC-GM was established in 1997, cars were a luxury item. Today, cars are a mainstream commodity. Vehicle sales have grown over 18-fold in the past 20 years, and China has become the world’s largest vehicle market. None of this would have been possible had China not opened its doors and taken advantage of the benefits that the world and companies like GM had to offer.
Q: What do you consider is the most important reform in the auto industry?
A: The introduction of the joint venture model played a pivotal role in the development of China’s automotive industry. It has combined the products, technologies and standards of global companies with the local market insights and adaptive capabilities of Chinese companies to make the industry globally competitive.
GM has one of the strongest and most enduring partnerships in the global automotive industry with Shanghai Automotive Industry Corporation.
SAIC-GM and the Pan Asia Technical Automotive Center in Shanghai celebrated their 21st anniversaries in June. They remain leaders in vehicle manufacturing and sales, automotive engineering and design. SAIC-GM-Wuling in Liuzhou, Guangxi, which celebrated its 16th anniversary in June, is China’s leader in mini-commercial vehicles. It also offers the homegrown Baojun brand, which was established in 2011 and has been one of the fastest-growing vehicle brands in China. In addition, Shanghai-based Shanghai OnStar is China’s leader in automotive telematics and SAIC-GMAC is the leader in automotive financing.
Q: How has your business strategy in China evolved?
A: Despite the incredible changes in China’s automotive industry over the years, GM’s commitment to working in China, with China and for China has not changed. From day one, GM has been committed to working with local partners to provide the best products and solutions tailored for our customers in China.
Through our partnerships, we have established unmatched capabilities in design, engineering, manufacturing and research and development. We have also built an integrated value chain that includes automotive telematics, automotive financing, aftersales and insurance.
GM believes China will play an important role in helping drive us to a future of zero crashes, zero emissions and zero congestion. We have a two-pronged strategy in China.
We are introducing exciting new products to meet our customers’ evolving needs and we are also bringing the best electrification solutions and advanced technologies to the market. For example, Super Cruise, the industry’s first hands-free driver assist technology, will soon officially be applied in China as part of our journey toward zero crashes.
Q: How much money have you invested in China over the 40 years, and how much do you plan to invest in the next five years. How many staff do you employ here?
A: GM and our joint ventures have a strong team of about 58,000 employees across China. Our ventures operate 27 manufacturing facilities across China. They include SAIC-GM’s new Shanghai battery assembly plant, which will support our growing lineup of new energy vehicles built in China for China.
The GM China Science Lab, which opened in 2009, focuses on the research and development of advanced technologies, including batteries, V2X and advanced materials. Its achievements are not only being applied in China, but worldwide.
To further strengthen our local capability in design and engineering, the Pan Asia Technical Automotive Center opened a new research and development center in Shanghai this year. It will enable us to accommodate more specific needs of Chinese consumers.
We will continue investing in China in the coming years.
Q: Foreign companies are always urging more reforms and faster reforms? What specific additional initiatives would help your business in China?
A: We are encouraged by the Chinese government’s plan to broaden market access. This shows how much the government values a vibrant economy and the automotive industry. We anticipate more initiatives and policy support in creating a better business environment.
Q: What’s the best part about doing business in China? What’s the most difficult?
A: China is truly a land of opportunities, where innovations are introduced at dazzling speed, challenging the status quo and propelling the industry forward.
The major challenge for us is keeping up with the diverse and rapidly changing needs of Chinese consumers. Our goal is to help all of our customers get better personal mobility solutions and make their lives more convenient.
Q: Shanghai is to host the first China International Import Expo this year. Will your company be taking part in the event?
A: General Motors looks forward to participating in the Import Expo and showing our ideas for making future mobility better, safer and more sustainable. We expect the Import Expo to inspire attendees, just as World Expo 2010 Shanghai did nearly a decade ago.