China's car of choice? Buick!
TESS VIGELAND: Alisa Roth told us earlier about the economic explosion that is China.
Well, it's an auspicious day for us here at Marketplace. Because today we bring you the debut of our new bureau in Shanghai.
Scott Tong, who used to cover the world from inside the Beltway, is now reporting from waaaaaaaaay outside that beltway. He's been in the Middle Kingdom for a few weeks getting the bureau set up.
We asked him to send us some first impressions: as a reporter, as a parent, as a Western expat now working overseas. Here's his first dispatch, about an alternative universe in China's auto industry.
SCOTT TONG: So we land in Shanghai and my uncle, who lives here, sends the nicest vehicle he can find to pick us up.
It's a blue van. A Buick.
This is a nice van. Smooth, spacious, giant leather seats. It's a three-piece suit with wheels.
And as we drive into town, we start seeing these blue Buicks everywhere. And we hear about them everywhere.
LISA: [Speaking in Chinese]
That's Lisa, she works at a local car leasing company. She says I should get one.So does Alex. He's with a competing leasing company.
ALEX: So I recommend a Buick . . . they're quite suitable for you to use that. If you buy U.S. van, so you are quite a little bit high class.
Now I have to say, I can't recall a single Buick on our street back home.
In the States, this is the brand that's fighting a "damaged" reputation. That's according to an executive at parent company General Motors two years ago.
Anyone seen the comedy "Fletch," circa 1985? Here's how Chevy Chase describes the generic, vanilla sedan.
CHEVY CHASE: As I pulled up to my palatial, imitation apartment building, I observed the familiar red Oldsmo-Buick of Mr. Arnold T. Pants, Esquire.
In China though, Buick enjoys a more dignified cinema reference. The Last Emperor had a Buick. Both in the movie and in real life.
EMPEROR: I am going to miss you, Johnston.
JOHNSTON: I shall miss you, your majesty.
Buick is also the car of choice for much of the business and the political elite. The upscale folks.
The blue corporate van goes for $40,000 in a place where the average buyer has one-eighth the purchasing power of his American counterpart.
Today in China, GM is the number one seller, with 11 percent of the market.
MARGARET BROOKS: This is the top-of-the-line Buick Lacrosse model.
Margaret Brooks directs vehicle sales service and marketing for GM China. She walks me around a showroom and explains how Buicks have been tailored to fit the local market.
Apparently, folks here are into very shiny, very manly cars.
BROOKS: There's a very proud Buick hood ornament that stands up. And in China, the consumer still really appreciates the jewelry like this hood ornament, and wants to see a lot of chrome to ornament the vehicle.
Brooks says it's not just the cars that are different here. It's also GM's business model. She says the China division moves much quicker than Detroit does. For instance, a lot of phone calls instead of meetings.
BROOKS: Absolutely. When you're in a market that's growing 26 percent a year, you have to be able to react fast. Otherwise the market passes you by.
Now, GM cars in China are not imports. The company partners with a local state-owned firm, and most of the vehicles are actually made right here in Shanghai. Which means the Buick is a local car with foreign cache.
That's one reason Grace Jiang bought one.
[Car key ambience]
She's 29, and she drives a bright red Buick hatchback.
Jiang likes the American label on her car. The popular wisdom here is that the Japanese brands are more flimsy. Say a Honda crashes into a Buick.
GRACE JIANG: If they have the same speed and they hit on the same side, the Japanese car maybe hurt the driver.
So Buicks are in in Shanghai, at least for now. But things seem to change in such a hurry in China that who knows how long that'll last. For one, Jiang says consumers here have zero brand loyalty.
JIANG: They want to change their cars, their house, and the mobile phones, very fast. If you're using a mobile phone three years, maybe your friends will say, oh you haven't changed your mobile phone yet? It's so long time! [Laughs]
The other thing is GM China faces a ton of competition going forward — from local Chinese makers just getting stared in the market and from the Japanese titans just coming in.
Industry analyst Wang Zhihui.
WANG ZHIHUI: Toyota's goal in China is to grab 10 percent of the market by 2010. The GM joint venture already has 11 percent. But after 2010, it's likely Toyota will catch up to GM.
And that's right around when my assignment in China will end. I wonder what we'll be driving to the airport then.
In Shanghai, I'm Scott Tong for Marketplace.