The board of GM has a week-long meeting in Shanghai. Someone just happened to be in the same place at the same time, and quite possibly unearthed the secret all of India is dying to hear: Under what brand will the Wuling cars be introduced once they hit India? Apparently, not Wuling.
Before we go there, let’s go back a bit: In December 2009, things were dire at GM. GM sold a crucial one percent share of their Chinese joint venture to its Chinese partner SAIC, a transaction that has been analyzed in-depth by Ed Niedermeyer. Something else happened in the darkest times of GM: GM handed its Chinese partner SAIC the keys to the Indian market, from which SAIC had been effectively locked out. GM and SAIC formed a 50:50 Hong Kong based investment company that owns the Indian operations. GM contributed their Indian presence, SAIC contributed $350m in cash that was in short supply at the times. For that pittance, GM sold off half of their future in the world’s next big auto market. Desperate times, measures, and all that.
Ever since, the question was: What cars will be brought to India? It quickly became clear that it won’t be automobiles that are the pride of American engineering. What will be brought to India are Wulings.
Wuling is the Chinese answer to Suzuki: Small and cheap boxes on wheels with pint-sized engines. They are made by the GM-SAIC-Wuling three-way joint venture, in which GM holds a minority interest. GM’s share was increased, but SAIC has the majority at that JV also. Recently, things weren’t as good as before at Wuling. The breadvan segment took a beating. India is getting even more important.
The trouble is, India is peering anxiously across the Himalaya, and on the subcontinent, Chinese goods have to contend with their own perception gap. All of India, well, all of India’s auto sites are on the lookout for Chinese vans and MPVs. Hooded and camouflaged testers are spotted with regularity on India’s rutted roads. A launch is expected for this year of early 2012. The big question that gives the Indians sleepless nights and reams of forum-fodder: Under which brand? Wuling? Baojun? Or Chevy?
Our Shanghai source possibly can shed some light on it.
In Shanghai, he happened to come across some party tents. He was told the tents are there to protect GM board members from the hot Shanghai sun. He is not a car guy, he’s in the catering business. Through that, he knows his delivery vans. What he spotted there were cars destined for the Indian market, which he characterized as “basically Wuling vans wearing Chevy badges, in various different styles including pick up bodies and regular bodies.”
If what was shown to the board will arrive in India, and unless people change their minds, those Wulings will be reborn in India as Chevys. Anything else would have been ill-advised. Wulings have already been entering South America with a bowtie. Here, they help to balance America’s significant trade deficit with Colombia, just as a for instance. Or look what’s happening in Egypt. An underreported revolution is that Wulings are taking over Egypt disguised as Chevys.
Hmmm, Chevrolet has been rumored to want to build an affordable 7-seater in Indonesia (that’s what their recently ressurected factory will build), aimed at the heard of Indonesia’s market, the Toyota Innova and Avanza/Xenia twin. I wonder if this car will be it as well. It certainly has innova’s shape and size.
Wuling and Baojun are Chinese brands; it makes no sense to sell them in India with those names. Although at the end of the day I’m sure most customers don’t care; they just want a cheap durable van.
But Chevy is a more well-known name in India than Wuling, and they’ve got nearly a full line of vehicles (mostly GM Daewoo-based) that the addition of Wuling vans and trucks will augment.
Wulings are already exported to South America, the Middle East and North Africa, rebadged as Chevrolets (see link). Their mini-trucks were even exported to the States for a time, though not for road use. Frankly, I wouldn’t mind if they returned as a bargain-basement, but street-legal, commercial vehicle.
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I am not sure I agree that customers do not care. Indians have demonstrated that they are susceptible to the mind control by the media when Nano’s sales cratered by 99% only to rebound when the news cycle moved the stories. If their thought leaders beat the drum “Chinese is BAAAAAAAAAD” hard enough, they WILL care.
….so, in the end, what exactly is the new GM bringing to the table here? (design?, engineering?, goodwill?, old dies and molds?). And more importantly, what’s going to be left on that table when the time comes to divvy up the (theoretical) rupees?
Following the money on this one is infinitely harder than spotting the Joker in a 3 card Monte game. But,I suppose, at least it get’s the general’s (sandal clad) foot in the Raj’s door.
Since it is a shared venture then I assume GM will get some profit from this. They also bring the name and dealerships since Chevy is already established as philadlj said.
I am curious to see how this pans out, since India doesn’t exactly like China after that Sino-Indian War in the 1960s. Even with a GM badge on it, this is gonna be a tough fight…considering the traction of Suzuki and Hyundai in the market.
Then again, as long as they don’t import those garbage Opels there anymore. Was that ever a colossal mistake, from what I’ve seen and heard.
May no longer be a significant issue, because I may be mistaken, but I think these two countries agreed a Free Trade Agreement in the last few years…
I am interested in seeing how this plays out as well. Having recently spent a good portion of my time in India, I can say with no doubt that Chinese brands are seriously looked down upon in India.
Bringing it under the Chevy brand looks good at first as Chevy has something of a decent reputation in India (with the Aveo and a couple of others). But quality always wins out….the moment these Wulings start breaking down is when Chevy will realize that they lost a good opportunity to grab a slice of the Indian market.
This fits into GM’s strategy of growing Chevy as a worldwide brand. GM has already built assembly facilities in India to sell Chevy branded cars there, but those cars are not aimed at the entry level. Small cheap vans and trucks are an important part of the Indian market. Tata may be having trouble getting Nano sales up, but their Ace pickup and Magic jitney van, which probably share components with the Nano, are doing well. Bringing in Chinese vans and trucks will allow GM/Chevy to compete in that market segment.
So what is the engineering pedigree of the Wuling vans (such as the one shown in picture)? Is this an indegenous Chinese product or does it have origins in Japan or elsewhere?
Why would it be Japanese? It’s also a GM product that they developed together with SAIC/Wuling so if it’s really based on anything’s all it’s GM’s light truck platforms.
It’s been a good seller and would probably do well in India for the same reason it’s done well in China-it’s cheap (under 4 grand starting) and sippy on gas.
In North America, I think people still think of GM, Ford, and Chrysler as being strictly North American products. That’s okay. Folks don’t have to know if they don’t want to.
The truth (TTAC) is that these days cars are made everywhere, and components are made anywhere. Domestics can be foreign, and foreigns can be domestic.
A couple years ago I took a walk through the shop, and noted the VIN’s of all the vehicles sitting there. We had a couple of Silverados, a Suburban, and I think an Avalanche, plus a Geo Metro, a Toyota Corolla, and a Honda Civic. I found it interesting that all the full size GM trucks were built in Mexico, and that all the so-called imports were built right here in Canada.