GMS CHINESE PARTNERSHIP

Presented By: Danielle Didear, Nik Jain, Anthony Kirk, Joann Mester, Abhinav Sharma, and Van Ly

HISTORY
Founded September 16, 1908 by William C. Durant 1909 GM Sells 25,000 cars and trucks.

1954 GMs U.S. market share reaches 54 percent and company

makes 50 millionth car.

GM led global sales for 77 consecutive years from 1931 2007 1991 Company loses industry record $4.45 billion

2008 Gas prices his $4 per gallon and truck sales plummet and

GM announces plan to shed 8,3250 jobs.

Failed to obtain government loans in 2009 which caused them to

file for Chapter 11 bankruptcy in June

Following bankruptcy, Hummer & Saab were sold and Pontiac

and Saturn were closed.

GM & SAIC HISTORY

GM manufactures and sells Chevrolet, Buick, Cadillac, and Opel

brand automobiles in mainland China

In 2003, China became the second largest single market for

General Motors, selling 201,188 vehicles, an 81.6% percent increase over the previous year.

SWOT - STRENGTHS
General Motors foreign penetration and growth Raise profits Larger player

SAIC
GMs expertise to grow SAIC into a global powerhouse Raise brand awareness More local knowledge

SWOT - WEAKNESSES
General Motors Release sensitive technology Rely on partner Profit sharing

SAIC
Not independent Profit Sharing The smaller player

SWOT - OPPORTUNITIES
General Motors Help with growing the brand Increase of customers Lower costs SAIC Gain electronic technology knowledge Grow globally Increase customers Lower costs

SWOT - THREATS
General Motors Use of their own intelligence against them Venture might fail SAIC Negative attitude from Latin or Asian customers Higher costs to operate outside of their own country

INSTITUTIONAL VIEW
- Chinas formal institutions mandates that foreign automakers

have local partners.

- Complying with that law has allowed GM to be better suited to accommodate with Chinas informal institutions and have more resources to succeed.

RESOURCES OF GM & SAIC PARTNERSHIP

GM is quite competent in automotive technological know-how SAIC is better aware of Chinese consumer taste Together, GM and SAIC are able to pool in resources to

accomplish tasks they would be unable to do on their own

GMS INTELLECTUAL PROPERTY

Successful partnership with SAIC is crucial.

GM has many years of expertise and technology that SAIC could

use to rise and create a global competitor for GM and other automobile companies
GM needs SAICs cultural intelligence and knowledge of the

areas consumers to help with design ideas and sales.

SAIC cut a side deal with Volkswagen (GMs Cadillac competitor)

that ultimately hurt GM.

So how far should GM be willing to risk to keep its relationship

with SAIC mutually beneficial?

INTELLECTUAL PROPERTY CONTD

Should GM share its intellectual property with SAIC? Is the risk

worth it in the end?

GM has intellectual property that can be extremely valuable to its

competitors. It is because of its value that GM should withhold the information on their intellectual property especially because SAIC has been known to go behind GMs back with Volkswagen, a direct competitor. SAIC and GM have a mutually beneficial partnership now that could be ruined if GM shared its intellectual property because SAIC may turn into a competitor. Also, this intellectual property automatically gives GM the upper hand because without it, SAIC would not have the means to advance. GM can also use it as leverage if they ever need to in the future.

EXPANDING OVERSEAS
SAIC wants to expand Over seas

SAIC wants to start sales in Latin America, south Asia, and

Europe
GM is currently Involved in sales Latin America and Europe

EXPANDING OVERSEAS CONTD

Should GM agree to partner with SAIC in their own foreign

affairs?

No, because the main reason GM and SAIC have such a

successful partnership is because it is mutually beneficial. GM gains SAICs knowledge of the Chinese culture and SAIC gains profits from GMs sales. If GM helps SAIC in foreign ventures in areas such as Latin America, what does SAIC have to offer GM? And as mentioned earlier, SAIC has been known to go behind GMs back with Volkswagen so who is to say they wont turn their backs on GM once they are established globally? (financials, credibility, and intellectual property).

CADILLAC DESIGN ISSUE

Gm sells many more Cadillacs in the U.S. than in China

Chinese have a term for Cadillacs, ben zhong

New generation tweaked to appeal to Chinese tastes Softer corners, more complex dash, plusher rear seats

CADILLAC DESIGN ISSUE CONTD

Should GM have tweaked the Cadillac? GM wants a more globalized product They already have a world wide presence China is a huge market

The tweaks are not big

CONCLUSION
Together, GM and SAIC have a wealth of resources that enable

them to carry out their business operations successfully in China.

15 year partnership that has proven to bring success to both

companies
GM is present with many questions:
Is GM willing to share their intellectual property with China?
Should GM partner with SAIC in Latin America, South Asia, and Europe or

keep these territories to themselves?

Should GM continue in the direction towards globalized products to meet the

demands of the markets?

It is evident these questions will have a large impact in the future

of both of these companies.

Questions?