Everyone knows that there is a huge automobile market in China. The prosper economy in China was boosting the future car-purchasing power of many consumers, giving both the business and private cars great opportunity. The whole market is worth billions of dollars every year. Car sales in China should grow 20% annually through year 2010, from 1995's 380,000 cars, and reach 3 million within a decade, estimates LIU Jinghui, an associate at A.T. Kearney in Beijing. For the same reason, every big automaker in the world wants to enter this growing market, and they also know that those who entered first would have the biggest cake.
But the problem then was that the automobile industry strictly controlled by the government. In 1990's, China government didn't want to see too much foreign investment flood into China's infant automobile manufacture area. At that time, all big auto-manufactures wondering around the huge opportunity, trying to find some breakthrough.
General Motors Corp. (GM) and Ford Motor were the most famous two.
Before GM started its Chinese venture, Ford Motor already got some progress. They cooperated with local manufacturers on some small areas such as auto-parts and automobile technology research. To compete with Ford in China, GM nominated a new president for their China branch in 1995, hoping to manufacture their famous sedan--Buick in Shanghai, one of the most prosper cities in China. Both GM and Ford started marathon talk with central and local government. To differ with Ford, GM proposed five principles for their China strategy: 1) long commitment of cooperation with Chinese automobile sector; 2) provide all kinds of latest high technology production facilities; 3) give training to managers and engineers; 4) support basic research in transportation, traffic safety, environment and human health; 5) help Chinese automobile sector to become a competitive player...