Comments on: SAIC to gain majority in SAIC-GM Joint Venture http://www.chinacartimes.com/2009/12/04/saic-to-gain-majority-in-saic-gm-joint-venture/ Explaining the Chinese Car Industry Thu, 09 Feb 2012 11:17:35 +0800 hourly 1 http://wordpress.org/?v=3.3.1 By: I __ H a t e __ C h i n a http://www.chinacartimes.com/2009/12/04/saic-to-gain-majority-in-saic-gm-joint-venture/comment-page-1/#comment-220881 I __ H a t e __ C h i n a Sun, 06 Dec 2009 14:15:55 +0000 http://www.chinacartimes.com/?p=8885#comment-220881 @ Go Red > Many Chinese auto companies are practically being trained by more advanced foreign companies through their joint ventures. Foreign companies teach their Chinese venture partners how to assemble cars; not how to engineer cars. All that foreign companies will do in China is like slight styling changes, but no vehicle engineering. Vehicle engineering in China cannot happen until foreign companies are permitted 100% ownership of their Chinese operations. This is why BAIC is desperately hunting for companies like Opel and Saab, because after 8 years of JVs with Hyundai and Mercedes BAIC learned how to screw cars together and run an auto assembly line, but not how to engineer cars. The same thing with GM in China. GM sees China as a market but not as the source of vehicle engineering. GM sees Korea as the source of vehicle engineering but not as a market. Since GM's vehicles are and will continue to be engineered in Korea, GM cannot afford to lose Daewoo, and this is why they took this drastic step of handing over the control of GM China in order to raise cash necessary for keeping Daewoo. @ Go Red

> Many Chinese auto companies are practically being trained by more advanced foreign companies through their joint ventures.

Foreign companies teach their Chinese venture partners how to assemble cars; not how to engineer cars. All that foreign companies will do in China is like slight styling changes, but no vehicle engineering. Vehicle engineering in China cannot happen until foreign companies are permitted 100% ownership of their Chinese operations.

This is why BAIC is desperately hunting for companies like Opel and Saab, because after 8 years of JVs with Hyundai and Mercedes BAIC learned how to screw cars together and run an auto assembly line, but not how to engineer cars.

The same thing with GM in China. GM sees China as a market but not as the source of vehicle engineering. GM sees Korea as the source of vehicle engineering but not as a market. Since GM’s vehicles are and will continue to be engineered in Korea, GM cannot afford to lose Daewoo, and this is why they took this drastic step of handing over the control of GM China in order to raise cash necessary for keeping Daewoo.

]]> By: Go Red http://www.chinacartimes.com/2009/12/04/saic-to-gain-majority-in-saic-gm-joint-venture/comment-page-1/#comment-220679 Go Red Sat, 05 Dec 2009 23:32:35 +0000 http://www.chinacartimes.com/?p=8885#comment-220679 GM needs engineering talent from companies like Opel and Daewoo probably more than their North American Operations. But I believe the Chinese auto companies will eventually catch up to American, Japanese and Korean companies in a decade or less. Many Chinese auto companies are practically being trained by more advanced foreign companies through their joint ventures. Eventually the Chinese companies may not need the foreign joint ventures anymore. Maybe GM sees this and wants to sell it's joint venture little by little while it is still worth something. GM needs engineering talent from companies like Opel and Daewoo probably more than their North American Operations. But I believe the Chinese auto companies will eventually catch up to American, Japanese and Korean companies in a decade or less. Many Chinese auto companies are practically being trained by more advanced foreign companies through their joint ventures. Eventually the Chinese companies may not need the foreign joint ventures anymore.
Maybe GM sees this and wants to sell it’s joint venture little by little while it is still worth something.

]]> By: I __ H a t e __ C h i n a http://www.chinacartimes.com/2009/12/04/saic-to-gain-majority-in-saic-gm-joint-venture/comment-page-1/#comment-220192 I __ H a t e __ C h i n a Fri, 04 Dec 2009 20:25:02 +0000 http://www.chinacartimes.com/?p=8885#comment-220192 GM did this to keep Daewoo. GM is selling its Chinese ventures in order to recapitalized Daewoo and fend off pressure from Korean government to hand over Daewoo. http://testfunda.com/examprep/mba-resource/current-affairs/article/rise-of-the-chinese-dragon-continues-gm-to-sell-stake-to-chinese-partner.htm?assetid=e614637a-3359-44ee-bf4e-88d0e6187fcb "Analysts say that GM is paying a high price to retain control of Daewoo, whose small car designs GM sees as critical in the scenario that oil prices continue to range above $70 a barrel. In exchange, GM is sacrificing control of two of the world’s fastest growing automobile markets." GM did this to keep Daewoo. GM is selling its Chinese ventures in order to recapitalized Daewoo and fend off pressure from Korean government to hand over Daewoo.

http://testfunda.com/examprep/mba-resource/current-affairs/article/rise-of-the-chinese-dragon-continues-gm-to-sell-stake-to-chinese-partner.htm?assetid=e614637a-3359-44ee-bf4e-88d0e6187fcb

“Analysts say that GM is paying a high price to retain control of Daewoo, whose small car designs GM sees as critical in the scenario that oil prices continue to range above $70 a barrel. In exchange, GM is sacrificing control of two of the world’s fastest growing automobile markets.”

]]>