Blog: Dave LeggettChina - go high, go low

Dave Leggett | 19 November 2003

It srikes me that GM is getting its basic analysis of the Chinese opportunity correct. For now, demand is polarised at both ends of the market spectrum. At the high end, luxury cars continue to sell well. China's booming economy is nurturing a growing number of very wealthy business people who can afford luxury products. In China, the numbers can get pretty big pretty quickly, so even though we're talking about a market niche, it is sizeable and profitable. Cadillac as a brand will always be looking up to Mercedes-Benz and BMW in China, but it's a market segment worth devising a strategy for. And at the bottom, low-cost cars for the emerging urban middle class make sense - cars like GM's Buick Sail. And GM is also getting the financing structures in place for these consumers - and appears to be doing that quicker than the rest. What about market segments in between? There will be an opportunity there of course - especially with inexpensive sedans that can double as revenue earners and taxis - but it won't be as high-growth.


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