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Extra info for American Wheels Chinese Roads
Once the visiting officials had completed their inspection, the workers and management team would return to playing cards or taking naps. In the minds of the BeiNei management, they had achieved the central goal of getting modern engine technology. The market was an entirely separate matter, far from their reach or experience. “The sales volumes would never get above one thousand to two thousand engines a year because there were never any real customers,” said the same GM veteran. Swando also understood that GM’s problems in China paled in comparison to the pressures in the home market.
That cash infusion had secured a 37-percent share of the joint venture when it was formed in 1984. Within five years, the Beijing Jeep joint venture was quietly turning profits of $90 million annually. If GM could get together with SAIC on a luxury car program, the profits on $40,000 sedans would be through the roof. But getting there would not be easy. Ford was already out in front, and the tough negotiators from SAIC would, no doubt, exact a mighty price from GM before awarding the project the world’s number one automaker.
That was never a very successful venture, but it was a start. The absence of both a ready market and a proactive partner did not stop GM from forming a $132-million joint venture to build the American pickup trucks for the China market. Not long after the ink was dry, GM realized that the Shenyang project and several other smaller projects in China were forging ahead without any clear strategy. There was one deal to sell an engine line in Beijing and other deals to sell used equipment to other companies in China, but little else.
American Wheels Chinese Roads by Michael J. Dunne