Five questions for Shanghai GM's Steve Betz

And other people news in Greater China

By Published on .

SHANGHAI--Since General Motors Corp. veteran Steve Betz, 48, succeeded Dale Sullivan in June 2006 as Chevrolet brand director at Shanghai GM, the company has been riding high.

About the same time the New York native arrived in China, Shanghai GM, the U.S. company’s flagship joint-venture with Shanghai Automotive Industry Corp. Group (SAIC), overtook Volkswagen’s flagship joint venture, FAW-VW Automobile, as the No. 1 automaker in the country. GM passed its rival thanks to the strength of Buick, a longtime favorite among high-income car buyers, and the successful launch of the mass-market Chevrolet.

GM's total car sales in China grew 36.7% in the first three quarters of this year. In addition, China’s passenger car market grew 30% in September 2006, after a slowdown over the past few quarters. Total sales will surpass four million vehicles this year, according to the country’s National Passenger Car Information Exchange Association.

But fortunes can change quickly in China. VW’s restructured management team has launched models like Sagitar and Skoda to win back the top spot in the market. At the same time, local car companies with strong political backing are aggressively eyeing global export markets to sell their own car brands--including GM’s own partner, SAIC, which is producing its own cars under the Roewe name using Rover technology.

In this competitive environment, Mr. Betz has spent the past four months visiting most of GM’s Chevrolet dealerships in about 20 cities around the country. Although new to China, he joined the U.S. auto giant in 1982, and his career included a stint in Kenya, where he ran GM's East African operations. He recently shared his views about China’s car market with AdAgeChina editor, Normandy Madden.

AdAgeChina: Who’s the average Chevrolet consumer in China?

Steve Betz: About 65% of our buyers are men. The average age is 37, and most are business people. Tier one to tier two cities are our strong points and part of that is because our Buick brands are stronger there, too, and a lot of our dealers sell the Buick brand also. But we don’t want to rule out the fact that there are major opportunities in tier three and four cities for us, because of the value relationship of our product.

In terms of income, it’s a moving target at this point. Some of our customers are self-employed, entrepreneurs with a high income. Others earn less because the company is paying for the car, so the average skews weird, but it’s a very broad range.

Consumers also change across China, because one area is so different from another. In Shenzhen [a relatively wealthy manufacturing base just over the border from Hong Kong], we do better with higher end products, versus Beijing, for example, where we do well with the Chevrolet Epica.

AdAgeChina: What are your plans to develop the Chevrolet brand?

Mr. Betz: We’re focused on growing each of the brands, specifically the [Cadillac] CTS series, and [Chevrolet] Lova, which we launched this year and it’s doing extremely well. We’ve hit the proper niche in Lova as a four-door hatchback. It has taken off, because it fulfills the need for interior comfort that customers are looking for but it’s also fuel-efficient and sporty on the outside. It appeals to men and women, and that’s really good for us. These are brands we plan to concentrate on and then sell up or sell down the line. We’ve got a very focused stategy as we move forward.

AdAgeChina: Chinese car makers like Geely want to export cars to the U.S. market. Do you think they will succeed?

Mr. Betz: I think there will be Chinese cars imported into the U.S. eventually, I definitely see that happening, there’s no doubt. They will be inexpensive, based on labor costs here, but I don’t think it will be like the Yugo [a cheap European car imported in 1985 that became a joke among American consumers]. That was a flash in the pan. Chinese cars will definitely be competition.

AdAgeChina: VW is determined to win back its position as the top car seller in China. How hot is the competition?

Mr. Betz: Of course, we’re very concerned. We view this market as a war, you draw up a battlefield plan and go after the market. We’re going after them just like they’re going after us. That’s how we’re approaching it and we do very heavily view them as the competition.

AdAgeChina: What has surprised you the most about China?

Mr. Betz: How advanced it is in the digital sector and that portion of the media. That was very eye-opening. It’s true more so than in the U.S., Chinese consumers seem to be much more focused on the digital side of entertainment and media. I had not anticpated that.

Other people news in Greater China

[hong kong] News Corp.'s Star Group has appointed Karen Davidson as senior VP, advertising sales, based in Hong Kong, to oversee its advertising sales activities in Hong Kong, South Korea, Japan, Malaysia, Singapore, Thailand, Indonesia and the Philippines. Previously, she was VP, integrated sales & marketing at Fox Cable Networks.

[hong kong] Wal-Mart Stores has appointed Ed Chan as president and chief executive of its operation in China. Previously, he was Hong Kong-based regional director, North Asia at Dairy Farm International Holdings, which owns supermarkets, beauty chains, convenience stores and restaurants across Asia. He succeeds Joe Hatfield, who will remain with the company in an advisory position after 12 years in China.

[shanghai] Jonathan Chajet has joined Omnicom Group’s brand consultancy Interbrand as strategy director, Asia/Pacific based in Shanghai. Previously, he was executive director, strategy at Omnicom’s Siegel & Gale, a strategic branding firm based in Los Angeles.

[beijing] The Chinese e-commerce giant Corp. has appointed Xie Wen as Yahoo’s general manager, China, based in Beijing. Previously CEO of Hexun, one of China's biggest consumer finance web sites, he succeeds Tian Jian, who will become a VP in Alibaba's investment department.
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