As sagging
demand in the United States and Western Europe has pushed General
Motors into bankruptcy, the auto behemoth has actually been
expanding in emerging markets and building new factories.
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CHINA
Recent
moves: In September 2008, GM launched the construction of a $250
million corporate campus in Shanghai. In two years, GM plans to
introduce its new electric model, the Chevy Volt, to the Chinese market.
Signs
of success? It's safe to say that if GM survives, it will have China to
thank. For years, the company's Chinese division has been a lone bright
spot in its mostly bleak portfolio. In 2008, GM's sales in China rose 6
percent (albeit, down from an incredible 18.5 percent the year before)
to 1.1 million vehicles while worldwide sales fell 11 percent. All
told, GM invests about $1 billion per year to expand production in the
world's fastest-growing car market. It boasts 10 wholly and jointly
owned subsidiaries with more than 20,000 employees and is the country's
largest automaker.
Unfortunately, even the Chinese division has
been losing a bit of luster lately with too many brands and its popular
Buick models losing out to Japanese competitors. But GM did catch a
break from Beijing's stimulus plan, which subsidizes van purchases by
as much as $1,170. With van sales rising 30 percent in the two months
after it was announced, this intervention has already proven more
valuable to the company than the billions provided by U.S. taxpayers.
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BRAZIL
Recent
moves: In April 2008, GM announced a plan to build a $200 million
engine plant in Joinville, Brazil. The plant is scheduled to be
operational by the end of 2009 and will manufacture flex-fuel engines
for the ethanol-dependent Brazilian car market.
Signs of
success? GM has been doing business in Brazil since 1925, and its GM do
Brasil subsidiary is its third largest in the world. GM's Brazilian
sales jumped 18 percent to nearly half a million vehicles in 2007.
Interestingly, GM's new chief executive, Fritz Henderson, made his
reputation as president of GM do Brasil in the late 1980s and early
1990s, transforming it from a backwater into a $1 billion a year
business that top executives called a "model for GM's future." Brazil
is understandably concerned about the future of GM -- the country's
stock market fell 3 points after the company's restructuring plan was
rejected by the U.S. government -- and announced new tax breaks for
automakers this week.
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INDIA
Recent moves: GM opened a
second plant in India in September 2008, bringing its production
capacity there to 225,000 vehicles per year. It also announced plans to
double the number of dealerships and service centers throughout the
country.
Signs of success? GM India, a wholly owned subsidiary
producing Chevrolet models, was established in 2004 and has enjoyed
years of double-digit growth. Despite the global recession, GM India
experienced 20 percent growth in sales in 2008. Although that figure is
expected to fall this year, the subsidiary remains bullish about its
future and is planning to launch a new minicar to compete with Tata's
$2,000 Nano. As for the new plant, it represents is an effort by GM,
along with Tata, Volkswagen, and others, to establish a presence in
Pune, a fast-growing manufacturing hub two hours outside of Mumbai.
Soon after the deal was inked, one Indian industrial official predicted
that soon, "Detroit will call itself the Pune of the U.S."
DMITRY ASTAKHOV/AFP/Getty Images
RUSSIA
Recent
moves: In November 2008, GM opened a $300 million plant on the
outskirts of St. Petersburg that will produce 70,000 cars per year.
Signs
of success? Just a few days after attacking U.S. foreign policy and
vowing to station missiles on Europe's doorstep, Russian President
Dmitry Medvedev was cutting a ribbon at the opening of GM's first
Russian plant, praising it as an example of U.S.-Russian cooperation.
GM's sales in Russia grew 73 percent between 2005 and 2007, giving the
company an 11 percent market share of what was, before the crash,
predicted to become Europe's largest car market by 2009. Unlike other
emerging markets, where GM owes much of its success to compact cars and
light trucks, GM has scored in Russia by selling SUVs and Hummers to
the country's newly rich. The good times couldn't last forever, though.
The Ministry of Industry and Trade predicts Russian car sales will fall
60 percent in 2009.
U.S. Embassy, Uzbekistan
UZBEKISTAN
Recent moves: On March 26
of this year, UZ-Daewoo, a venture partly owned by GM through its
Korean subsidiary Daewoo, announced a plan to open a new car plant in
Tashkent, the capital of Uzbekistan, to produce 15,000 Chevrolets per
year and create 1,200 jobs.
Signs of success? Along with local
partner Uzavtosanoat, GM has been producing Chevrolet and Daewoo models
in Uzbekistan for sale domestically and throughout Central Asia since
2007. It produced 200,000 vehicles in the country in 2008. Speaking in
Uzbekistan at a ceremony for the creation of GM Uzbekistan, recently
ousted chief executive Rick Wagoner described the region as one of the
"world's fastest-growing markets." To support its growth in Uzbekistan,
GM established a powertrain partnership in 2008 with the goal of
eventually building 360,000 engines per year for Uzbekistan and
regional export. GM may be coming to regret its Uzbek gamble, however. Production at its factory in Astana fell 14 percent in the first two months of 2009 thanks to sagging demand from Russia.