General Motors Co
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 minivan.
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 told Reuters.
(Reporting by Ben Klayman; Editing by Tim Dobbyn)