Bang! Bang! Click.

The following is a counterfactual version of a news-story published recently at Automotive News. Chery plans to tackle the European market, they say. They are moving in as General Motors abandoned the market entirely as it was all simply too much trouble for them.

2018 Buick Regal saloon: GM N America

To understand the weirdness of GM’s decision, try reading the ANE story with “GM” in place of Chery. Here is how it now reads:

“Detroit, MI – American automaker General Motors (GM) has selected Germany to be the base of its coming move into Europe. GM says it is America’s largest car exporter. The company is determined to compete on the same level as the world’s major automakers as soon as possible, the company declared.

2004 Buick Regal Abboud edition: hooniverse

“If GM is to become a global brand, we need to go to Europe,” said GM Chairman, Dan Dexter-Dinsdale.

Starting in January, the new limited-liability subsidiary GM Europe GmbH will begin operations in a development and design center in Russelsheim, a town not far from Mainz, one-time home of Johann Gutenberg. Its main task will be preparing the launch of models for the European market to be sold under the “Opel” brand starting after 2020.

GM said its models will be competitive with those offered by the leading European automakers in terms of quality, design and technology.

The Russelsheim center will focus mainly on design, development, marketing and sales. In the initial phase, GM Europe aims to employ roughly 30 to 50 employees by the end of next year in research and development.

GM introduced its first offering for European markets the Excelle saloon, at the Frankfurt auto show in September last year.

“We presented ourselves as a brand at the IAA a year ago. Now we will execute on our plans for Europe,” Dexter-Dinsdale said.

GM is not the first American automaker to go to Germany. Ford has been an established player since the 1990s, selling vehicles under the Mercury brand in southern and eastern Europe. Chrysler has no plans to attempt to sell in Europe for the forseeable future.”

ooo

You can read the original Automotive News story yourself. It makes clear that Chery thinks being in the European market is worth doing. And why not? For me the most revealing sentence was the wish to compete on the same level as existing companies. By its actions, GM declared it could not compete at all, being unable to do what Chery is about to do.

Who would have thought a decade ago GM would abandon the EU? Who now thinks it impossible Ford could do the same? We, do after all, live in the age of the unthinkable happening.

Author: richard herriott

I like anchovies. I dislike post-war town planning.

9 thoughts on “Bang! Bang! Click.”

  1. The best thing with Rüsselsheim is not so much its proximity to Mainz (where*btw* vine taverns and ‘Fassenacht’ = carnival are far more prominent than Johannes Gutenberg) but the possibility to get to FRA Airport in about a quarter of an hour…

    Some years ago Hyundai/Kia set up a design and technical development centre in Rüsselsheim, just a couple of hundred metres away from GME TDC (Opel).

    Why did Hyundai come and GM leave?

    1. Yes, the wines are pretty nice. When I think of Fasnacht, I think more of Switzerland. That said, I was only ever there in summer time. The bit that stood out was the Gutenberg association. Maybe my hypothetical GM would like to emphasise that association rather than lovely, lovely wine.

    2. With a rapidly growing number of analphabets in German population I wouldn’t bet on an association with Gutenberg being a good idea.

      The intended Chery development centre will be located in Raunheim, even closer to FRA airport – Raunheim is home to the FRA kerosene tank camp…

      Why did Hyundai/Kia and Chery choose Frankfurt for their development centres? Is it just the airport or something else?
      With the exception of PSA and Renault nearly every importer has its German or European HQ within twenty kilometres of Frankfurt but that’s a completely different business from a design centre.

    3. Mazda’s HQ is located in Leverkusen, but their European design centre is located in Oberursel, which is near Frankfurt.

      Borgward have chosen Stuttgart for their European base.

  2. Excellent point made with this article; what is it about particularly US based car makers that they can’t compete on the world stage whereas Asian car makers just forge ahead and successfully dominate every market? By US based, I would also include the moribund Fiat Chrysler which seems to have adopted the defeatist attitude of not being up to the job. I used to think the Asian takeover of the car business would result in more blandness and conformity but Korea and to a lesser extent, Japan are where the interesting design developments are happening. If Ford and GM closed today, obviously it would be devastating to the thousands of workers who depend on their livings from them, but consumers would not really miss out. Despite the hype from car stenographers/journalists, is the new Focus better than a Kia Ceed? I note the latter has adopted independent rear suspension for all models while the former has abandoned it for the versions most people buy.
    As for FCA, I remember years ago, the late Sergio Marchionne positing that Lancia would be Fiat’s Lexus, a totally laughable and ridiculous idea, but it showed the lack of vision. Why would an old, established company like Fiat need to imitate a Japanese company? If Lancia was still more than it is, would they now be claiming it was Fiat’s answer to Genesis?
    In conclusion, these three American patients have no future without government bailouts and protectionism. Perhaps Chery will buy out FCA or Ford Europe ; the quality could only improve.

    1. It’s not only US car makers that aren’t competitive, there are very few US made products (except IT and stuff intended for killing people) that sell on the world market when they are more complex than a plastic bucket. That’s something homo sapiens ssp. trumpiformis doesn’t get: that it’s not taxes or tariffs that prevent people from buying US made products, it’s the products themselves.

  3. I wouldn’t run down the Americans too much – they do okay in aviation and chemical production, and I woudn’t call those simple products. By value the US is the world’s second largest exporter behind China and have a big role in placing and receiving direct investment, which to me indicates financial and technological competence.

    We might find it depressing, but the truth is that western markets are saturated and a pain to do business in – highly regulated with demanding consumers. They’re also facing slower growth rates over the coming decades. Much as we may like having many brands to choose from, we can’t blame manufacturers for prioritizing opportunities in growing markets, rather than flogging an increasingly ill horse in the old world.

    That said, emerging markets such as India, Russia, Brazil and China aren’t automatically guaranteed to be pots of gold, either (several manufacturers got stung by a downturn in Brazil, for example).

    From China’s point of view, many domestic Chinese manufacturers face over-capacity, and foreign investment / exporting may be seen as one solution to this. I expect there to be a pretty big shake-up of domestic manufacturers in China, in the medium term (next 10 or so years).

  4. As a post script, more details on the situation which domestic Chinese manufacturers face, from Reuters, earlier this month. No wonder the Chinese are broadening their horizons and I’d expect to see more, similar announcements in due course. Although Chery is China’s largest exporter, that only amounts to around 150k to 200k or so vehicles globally, each year. They also have a tie-up with JLR, which might help, although I think they’ll face an uphill struggle.

    https://www.reuters.com/article/us-china-autos-investment-analysis/automakers-fret-as-china-clamps-down-on-capacity-seeks-consolidation-idUSKCN1LK0GZ

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