General Motors recently announced that April new car sales in the United States were 27% higher than last year, providing further evidence of their remarkable turnaround since filing for Chapter 11 bankruptcy in 2009. While this recent growth in the US is an exciting trend for them, one of the primary factors underpinning their economic resurgence has been their performance in the Chinese domestic automotive market. The growth and attractiveness of this market has been well publicized of late – a recent research report indicates that new car sales in 2010 in China were over 18 million, up over 30% from 2009.
It is one thing to read about growth such as this on paper but it is an entirely different experience to witness it in person for oneself. After a recent visit to China, my first in a year, the anecdotal evidence of the size and growth of the appetite for new cars in China was impossible to ignore. During the twenty minute ride from the Pudong International Airport to the CSR Shanghai office, I felt as if I was travelling through one giant car show.
On this route, easily more than half of the billboards along the freeway were for automobiles, and they were not just ones targeting the new middle class that is looking to buy their first vehicle. Reflecting the growing wealth in China, signs for Lotus, Porsche and others were interspersed with those advertising American, Korean and Japanese models from GM, Ford, Hyundai and Toyota. The breadth of available models was also staggering. In a span of about thirty seconds the car I was in passed a Honda, Volkswagen, Chevrolet, Ford, Kia and a couple of domestic Chinese brands in succession. It is easy to think that the USA or parts of Europe are the pinnacle of choice, but I learned quickly that that was clearly not the case. To hammer that point home, we then drove down a street lined with car dealerships – Toyota, BMW, Chevrolet, Buick, Infiniti, Cadillac, Land Rover and Jaguar. It was just unbelievable.
Plainly stated, the automotive opportunity in China is incredibly exciting. It is exciting for GM as well as every other carmaker. It is also exciting for suppliers of automotive technology and this opportunity is something that we are very excited about at CSR. With our existing automotive imprint – we can proudly name a number of the auto manufacturers I’ve mentioned above as users of CSR technology – and expertise and presence in China, we feel well-positioned to capitalize on this opportunity. In another year, I would not be shocked if my driver is using a navigation device to find his way to my hotel while carrying on a conversation over his wireless headset.