* GL8 sales a 'rounding error' in massive China auto market
* Minivan profitable as it doesn't require much investment
* GM has weighed bringing the Buick vehicle to U.S. market
By Ben Klayman
SHANGHAI, April 25 General Motors Co (GM.N)
killed its minivan in the U.S. market thanks to its soccer-mom
stigma, but the automaker has carved out a high-priced niche
for the vehicle as a chauffeur-driven executive ride in China.
While many American families have shifted to crossover
vehicles that offer space similar to minivans without the
perceived dowdiness, China's business elite like the Buick
GL8's roominess and features for getting around in the world's
largest auto market.
"The market for this really only exists in China and it's a
niche that we pretty much dominate here," Lowell Paddock, vice
president of planning for GM's international operations, told
Reuters last week at the Shanghai auto show.
Sales last year for the GL8 were 52,127, what Joseph
Phillippi of AutoTrends Consulting called a "rounding error" in
China's 17.2 million light-vehicle market. Sales have hovered
in that area the last several years for the Shanghai-built
While a far cry from the 336,000 minivans GM sold in the
United States in 1999, the Buick minivan is proving quite
popular with its Chinese customer base since its launch there
in late 1999. GM stopped making minivans for the U.S. market in
the fall of 2008.
"The demand for the GL8 is just huge. It's unbelievable,"
GM's China chief Kevin Wale told reporters in Shanghai. "So
many people ringing me up, saying, 'I've ordered one. Can you
get it to me quicker?'"
GM has looked at bringing the minivan back to the U.S. and
Canadian markets using the GL8, but officials acknowledge for
now the plan is for it to remain on sale only in China.
"They've looked at it on and off as long as I've been out
here," Wale said of U.S. officials. "They've made a fundamental
decision that says demand for that type of product's not strong
enough. We say that's fine. We'll just keep selling out here."
The vehicle, built at a plant GM operates under a joint
venture with China's SAIC Motor Corp (600104.SS), generates a
"boatload of money" because it is based on an old U.S. minivan
platform that does not require a lot of investment, Phillippi
said. However, it would likely be costly to upgrade the GL8 to
match current U.S. safety and feature requirements.
"I doubt whether the electrical or electronic architecture
could handle the kind of hardware and technology you'd want to
put into it to make it for the U.S.," he said. "I love the car,
but it may be impossible without massive investment."
For instance, Susan Docherty, head of sales and marketing
for GM's international operations acknowledged the vehicle
lacks the third-row, fold-flat seats U.S. car buyers prefer.
However, the newly redesigned GL8 and its still-available
predecessor, the GL8 First Land, can boost sales in China as it
lures some luxury-seeking customers, she added. The minivans
sell for the equivalent of $35,000 to $58,000 in U.S. dollars.
Any additional demand in China could be met by boosting
output as much as 30 percent at the Shanghai plant by adding
another crew of workers, GM executives said.
Paddock emphasized no changes would be made that would
disappoint the GL8's core Chinese executive customers. GM even
markets the GL8 in China as "business class on wheels."
"We wouldn't tamper with that to meet another market's
requirements," he said. "It's important that that be spot on in
the China market."
At a time when GM is focused on building cars it can sell
globally, China executives at the U.S. automakers are perfectly
happy to keep the GL8 a China-only story.
"There is still space for local programs and because of the
size of the (Chinese) market they can be very successful," Wale
(Reporting by Ben Klayman; Editing by Tim Dobbyn)