Liu grows China into GM's No. 2 market

Strong Buick & Chevy sales rival VW's dominance

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SHANGHAI--As General Motors’ top marketer in China, Joseph Liu has witnessed both the awesome scale of China’s 1+ billion population and the harsh realities of operating in the world’s No. 3 car market.

In the past year, the U.S. auto giant has added two brands, Chevrolet and Cadillac, to its stable alongside Buick, a model popular with business execs and government officials since it launched in 1999.

When Chevrolet rolled out last March, it quickly exceeded expectations, selling 30,000 units in the first three months. While that figure is a drop in the bucket of China’s total car industry (5.5 million cars last year), it was a milestone for GM’s Shanghai-based executive director of vehicle sales, service & marketing, Greater China.

“China is now the third-largest market for Chevrolet globally after the U.S. and Brazil,” said Mr. Liu, and it’s still growing fast. GM expects to sell 100,000 Chevy cars in China in 2005. “We believe, in the long run, it will overtake Buick.” GM sold 258,000 Buicks in China last year.

However, the company is looking at a long, slow process to build Cadillac, which was introduced last October. In the first six months of 2005, GM sold just over 1,200 units in a luxury car market dominated by big, plush German models loved by rich Chinese looking to show off their new wealth. Consumers here think Cadillac is “too small,” he explained, so the company is developing a larger model that will hit dealer showrooms within two years.

Bridge for JVs
“At that point, sales will grow, but right now, we are focused on establishing the brand and a national dealer network. Our key focus is to get the brand established, get it recognized and get ready for the larger car,” added Mr. Liu, a native of Taiwan who has spent more than 20 years in the auto industry.

GM has invested over $2 billion in China in seven joint ventures and two wholly-owned enterprises employing 13,000 workers. China is already its second-largest market in the world, behind the U.S., and in a few short years, GM, a relative latecomer to China, has managed to amass an 11% market share, according to Automotive Resources Asia. It's now just three points below the market leader, Germany's Volkswagen, which has produced cars in China since 1985.

In addition to his GM China role, Mr. Liu acts as a ”bridge” between GM’s multiple joint venture partners, “a very tough job,” according to Barry Leung, Shanghai-based regional director, Greater China at Bates Asia, one of three ad agencies working with GM in China.

Bates has worked on the Buick brand since it launched in 1999. McCann Erickson won the Chevrolet account last year in a pitch against Foote, Cone & Belding Worldwide. Creative for Cadillac is developed by Leo Burnett Worldwide and Chemistri, a dedicated unit set up for GM by Publicis Groupe agencies in Detroit, following a pitch against TBWA Worldwide.

GM’s advertising tends to run only in China’s richest cities, however, supported by below-the-line marketing in “tier two” and “tier three” cities, carried out by car dealers under GM’s supervision. Even in the top cities, ads are tweaked to appeal to local consumers, because “what’s good in Shanghai might not be good for Guangzhou or Chongqing,” said Mr. Liu.

Localized print ads for the Buick Regal, for example, reflect that Shanghai consumers like the flashy 2.5 model, but Guangzhou consumers appreciate value and Beijingers look closely at optional specification, according to Mr. Liu, “even though the Regal brand is national and has the same positioning overall.”

"Joseph has rare skills that make him a marketing talent. In China, people who buy cars range in their knowledge of motor vehicles from the quite basic to very sophisticated,” said Hong Kong-based T.H. Peng, area director, Greater China for McCann Worldgroup in Hong Kong.

"Weekend Killer"
He honed his skills in another challenging car market, his native Taiwan, one of the few Asian countries with a strong local manufacturing base. Prior to moving to Shanghai in June 2001, Mr. Liu was managing director of GM’s operation in Taiwan. Before that, he spent more than 15 years with Ford Motor Co.’s joint venture in Taiwan in various sales and marketing roles.

Juggling sales and marketing responsibilities for three models means Mr. Liu has very little free time, but cars are also his hobby. Colleagues jokingly refer to him as a “petrol head,” “automanic” and “a walking dictionary for the auto industry.”

He’s also known as the “Weekend Killer,” said Mr. Leung, because regularly schedules internal meetings on Saturdays and Sundays.

Despite his outwardly calm, composed demeanor, Mr. Liu admitted, “We’re under high pressure. People say China is a very profitable market but that’s history. The market is getting very tough because basically every global player is here. We basically invested for the long run.”

Cheat Sheet

Joseph Liu, executive director of vehicle sales, service & marketing, Greater China for General Motors

Age? “Under 50”

How do Chinese differ from Western car buyers?
In China, there are a lot of more people involved in the decision to buy a car--mothers, fathers, friends, peers. Customers here are also very critical of car interiors here, as if they were buying a house. In the U.S. and Europe, the interior is more functional.

What is your biggest challenge?
Developing local marketing talent up-to-speed with an international perspective. They have great opportunities but it takes time to grow people and gain experience and business grows here so quickly. Four years ago, we only sold 58,000 cars a year, now we sell ten times that, and we’ve gone from one brand to three brands. That’s a big stretch for the sales and marketing team.

Your favorite GM model? I mostly drive a Cadillac GTS.

Your favorite Shanghai restaurant? For Western food, M on the Bund, which has very consistent quality and good location. For Chinese, Crystal Jade at Xin Tian Di.

Your favorite Shanghai hangout? A neighborhood karaoke parlor.

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