Sales of General Motors' premium Buick, Cadillac, and Chevrolet brands have decreased by a third to 1.3 million vehicles annually over the past five years as consumers prefer smart EVs produced by domestic companies like Xpeng, Nio, and BYD.
According to executives at the American automaker, GM intends to target wealthy consumers in China's megacities with niche, luxury imports in order to create some buzz around its American brands.
The business will hold invitation-only events to showcase potential products, set up "experience centers" in urban hubs, and perhaps stage pop-ups at particular locations using a new direct sales platform called Durant Guild, they said.
"Durant Guild is not a volume play, but if we do a good job and the products sell well, it will create a lot of buzz around Cadillac and Chevy and will help how people perceive our products and technology," the head of GM in China, Julian Blissett, told Reuters.
The all-electric GMC Hummer pickup or sports utility vehicle (SUV), the massive gasoline-powered Chevrolet Tahoe SUV, or the svelte Chevrolet Corvette sports car are a few examples of American premium models that Durant Guild will sell but he declined to specify which specific models.
Such "halo cars," according to Blissett, a 16-year veteran of the Chinese market, would fit in well with urban consumer communities that have begun to show interest in high-performance vehicles for racing or off-roading SUVs.
"There's a lot more appetite to take more off-road types of vehicles to explore nature, and that wasn't a trend five, 10 years ago," Blissett said in an interview.
The William Durant-inspired Durant Guild, which will be fully owned and run by GM, will make its official debut as early as this month.
The first of a series of invitation-only events marking the launch is scheduled to take place in Shanghai on Friday.
GM hopes to be able to channel any enthusiasm and energy the imports create back into GM's current models in the nation by using a sales and marketing strategy similar to those that were successful for Tesla and Apple in China.
"That will be a positive impact on our business and will support our growth plans in China," Blissett said.
GM intends to accomplish this without utilizing conventional offline dealerships. It was unclear right away how GM intended to service vehicles bought through Durant Guild.
Global automakers like GM, Volkswagen, and Toyota, who dominated China's combustion era, are steadily losing ground to domestic rivals in the nation's burgeoning EV market.
Since the 1990s, foreign brands like Buick and Chevrolet have dominated the market in China, regularly capturing a combined 60 per cent to 70 per cent share of passenger car sales.
However, only 52.4 per cent of the market was controlled by foreign brands in the first eight months of 2022.
Sales at GM's Chinese joint venture with SAIC Motor had decreased 4.6% by the end of August when compared to the same period the previous year, while BYD sales had increased 267 per cent.
A new generation of smart EVs of GM's will be released in China this year, beginning with the Cadillac Lyriq SUV, making it all the more crucial for GM to boost brand perception there.
Durant Guild's Felix Weller said that GM had identified three new consumer segments that it hoped to reach.
First, there are the outdoor enthusiasts who prefer to stay close to home after the pandemic that restricted travel options by glamping, picnicking, trekking, and cycling.
Then there are the executive VIPs, who are successful in their careers and very busy. The third category consists of young, athletic drivers who drive performance cars on racetracks.
Later, without providing more information, a spokesperson claimed that GM was also interested in wooing other communities in China through Durant Guild.
Uncertainty remained regarding the precise competitive circumstances in the Chinese auto market that prompted General Motors to introduce a new direct-to-consumer sales channel for specialty vehicles imported from North America.
When asked how SAIC, GM's Chinese partner, had reacted to Durant Guild, Blissett responded that SAIC had given the project their full support.
"There is no fundamental tension," he said.
The head of GM China also claimed that, in part because there was no crossover, there had been no pushback from Chinese dealers selling Buick, Cadillac, and Chevrolet cars for GM and SAIC.
"It's a business they don't have to date, so we're not cutting anything from anybody. It's an incremental, additional business," Blissett said.
A SAIC spokesperson responded to a question regarding Durant Guild by saying, "The new platform is complementary to SAIC-existing GM's business. It doesn't conflict with anything we do."
Weller stated that while Tesla and other EV startups have placed their experience centers inside malls, Durant Guild will attempt to go beyond that strategy. However, that strategy is still being finalized.
He claimed that GM had no plans to export the Durant Guild model outside of China or to use a similar direct-to-consumer model for Buick, Chevy, and Cadillac vehicles already sold in China.
A direct sales model, like Durant Guild, is a cost-effective way to market cars and maximize profits, according to Chee-Kiang Lim, managing director for China at Detroit-based automotive consultancy Urban Science. GM's focus on changing consumer lifestyles could be a differentiator.
However, he argued that GM shouldn't ignore an even more important consumer trend, in which people are becoming more preoccupied with connected, smart features.
"What Chinese consumers want is to extend their digital lifestyles to their cars. Cars from foreign brands designed and engineered overseas are increasingly not meeting these needs," Lim said.
"If Durant can overcome this bias and provide high-tech, personalised features and seamless connectivity to China's digital ecosystems, its odds of success in the China marketplace will be higher."
(Source:www.reuters.com)
According to executives at the American automaker, GM intends to target wealthy consumers in China's megacities with niche, luxury imports in order to create some buzz around its American brands.
The business will hold invitation-only events to showcase potential products, set up "experience centers" in urban hubs, and perhaps stage pop-ups at particular locations using a new direct sales platform called Durant Guild, they said.
"Durant Guild is not a volume play, but if we do a good job and the products sell well, it will create a lot of buzz around Cadillac and Chevy and will help how people perceive our products and technology," the head of GM in China, Julian Blissett, told Reuters.
The all-electric GMC Hummer pickup or sports utility vehicle (SUV), the massive gasoline-powered Chevrolet Tahoe SUV, or the svelte Chevrolet Corvette sports car are a few examples of American premium models that Durant Guild will sell but he declined to specify which specific models.
Such "halo cars," according to Blissett, a 16-year veteran of the Chinese market, would fit in well with urban consumer communities that have begun to show interest in high-performance vehicles for racing or off-roading SUVs.
"There's a lot more appetite to take more off-road types of vehicles to explore nature, and that wasn't a trend five, 10 years ago," Blissett said in an interview.
The William Durant-inspired Durant Guild, which will be fully owned and run by GM, will make its official debut as early as this month.
The first of a series of invitation-only events marking the launch is scheduled to take place in Shanghai on Friday.
GM hopes to be able to channel any enthusiasm and energy the imports create back into GM's current models in the nation by using a sales and marketing strategy similar to those that were successful for Tesla and Apple in China.
"That will be a positive impact on our business and will support our growth plans in China," Blissett said.
GM intends to accomplish this without utilizing conventional offline dealerships. It was unclear right away how GM intended to service vehicles bought through Durant Guild.
Global automakers like GM, Volkswagen, and Toyota, who dominated China's combustion era, are steadily losing ground to domestic rivals in the nation's burgeoning EV market.
Since the 1990s, foreign brands like Buick and Chevrolet have dominated the market in China, regularly capturing a combined 60 per cent to 70 per cent share of passenger car sales.
However, only 52.4 per cent of the market was controlled by foreign brands in the first eight months of 2022.
Sales at GM's Chinese joint venture with SAIC Motor had decreased 4.6% by the end of August when compared to the same period the previous year, while BYD sales had increased 267 per cent.
A new generation of smart EVs of GM's will be released in China this year, beginning with the Cadillac Lyriq SUV, making it all the more crucial for GM to boost brand perception there.
Durant Guild's Felix Weller said that GM had identified three new consumer segments that it hoped to reach.
First, there are the outdoor enthusiasts who prefer to stay close to home after the pandemic that restricted travel options by glamping, picnicking, trekking, and cycling.
Then there are the executive VIPs, who are successful in their careers and very busy. The third category consists of young, athletic drivers who drive performance cars on racetracks.
Later, without providing more information, a spokesperson claimed that GM was also interested in wooing other communities in China through Durant Guild.
Uncertainty remained regarding the precise competitive circumstances in the Chinese auto market that prompted General Motors to introduce a new direct-to-consumer sales channel for specialty vehicles imported from North America.
When asked how SAIC, GM's Chinese partner, had reacted to Durant Guild, Blissett responded that SAIC had given the project their full support.
"There is no fundamental tension," he said.
The head of GM China also claimed that, in part because there was no crossover, there had been no pushback from Chinese dealers selling Buick, Cadillac, and Chevrolet cars for GM and SAIC.
"It's a business they don't have to date, so we're not cutting anything from anybody. It's an incremental, additional business," Blissett said.
A SAIC spokesperson responded to a question regarding Durant Guild by saying, "The new platform is complementary to SAIC-existing GM's business. It doesn't conflict with anything we do."
Weller stated that while Tesla and other EV startups have placed their experience centers inside malls, Durant Guild will attempt to go beyond that strategy. However, that strategy is still being finalized.
He claimed that GM had no plans to export the Durant Guild model outside of China or to use a similar direct-to-consumer model for Buick, Chevy, and Cadillac vehicles already sold in China.
A direct sales model, like Durant Guild, is a cost-effective way to market cars and maximize profits, according to Chee-Kiang Lim, managing director for China at Detroit-based automotive consultancy Urban Science. GM's focus on changing consumer lifestyles could be a differentiator.
However, he argued that GM shouldn't ignore an even more important consumer trend, in which people are becoming more preoccupied with connected, smart features.
"What Chinese consumers want is to extend their digital lifestyles to their cars. Cars from foreign brands designed and engineered overseas are increasingly not meeting these needs," Lim said.
"If Durant can overcome this bias and provide high-tech, personalised features and seamless connectivity to China's digital ecosystems, its odds of success in the China marketplace will be higher."
(Source:www.reuters.com)
