Author: Da Yan

Recently, General Motors officially announced the launch of a brand new lifestyle platform – The Durant Guild (道朗格) for its imported car business in China, bringing its most iconic models into the Chinese market. With the introduction of The Durant Guild into China, the one-week offline exhibition “The Durant Guild: Dare to Go Beyond” also opened in Shanghai.

“The Durant Guild” was transliterated from the English name of the platform, “The Durant Guild,” directly named after William “Billy” Durant, the founder of General Motors. Naming this brand new high-end imported car platform after the founder’s name demonstrates General Motors’ determination to create such a platform in China.

What cars can be found on The Durant Guild? As we all know, as an American brand, General Motors has a small but strong presence in the full-size pickup truck, full-size SUV, and muscle car markets, with many domestic users showing a strong preference for these models. At “The Durant Guild: Dare to Go Beyond” offline exhibition, models such as the GMC electric Hummer, Yukon, Chevrolet Tahoe, Solrod, Corvette, and others were also showcased, providing attendees with an up-close experience of the charm of these classic American models.

At the last three China International Import Expos, the General Motors booth has attracted a lot of attention. This also laid the foundation for General Motors to integrate its related import car businesses in China and form a greater force.

According to Felix Weller, the general manager of The Durant Guild platform, it will also serve as a platform for social, cultural, and innovative integration. The Durant Guild will open up new spaces and find the most exciting products that can be tailored to people’s personalized lifestyles.With the increasing homogenization of domestic car models, more models that cater to the personalized pursuit of Chinese consumers, even those that are deeply customized or handmade, will gradually appear on the “Daolangge” platform.

Does the domestic market need “Daolangge”?

The biggest driving force behind General Motors’ creation of a new high-end import car business platform is the gradual upgrading of Chinese consumers’ needs.

First of all, as the homogenization of the domestic car market becomes increasingly serious, car models that pursue individuality and high repurchase rates have become a new purchasing requirement for many consumers. American full-size pickups, full-size SUVs, and American muscle cars are good solutions that can satisfy consumers in this regard.

However, I’m sure many people are curious as to why these full-size models and muscle cars, which are long-standing products under General Motors, are only now being aggressively promoted in the Chinese market.

There are four major car markets in the world: China, North America, Europe, and Japan. Different geographic environments and social backgrounds create radically different driving habits, and the biggest difference reflected in car products is size. In terms of the size of the car models preferred by users, North America > China > Europe > Japan.

And we will find something interesting, the above ranking has only formed in recent years. If we go back to ten years ago, the difference between Chinese users and European users’ car preferences was almost negligible, and it was only greater than Japanese users. Because China is a fast-developing economy, it corresponds to continuously evolving driving habits and automotive culture.

Starting in 2008, the Chinese market saw an A-class car boom, with A-class cars led by joint venture brands such as Langyi, Xuanyi, and Corolla topping sales lists for years. Today, Wei Xiaoli and a host of independent brands that understand Chinese consumers’ needs have entered the market for large SUVs, reflecting changes in user consumption patterns and preferences.

Therefore, now is a good time for General Motors to introduce full-size car models to the Chinese market.

Secondly, buying a car on the “Daolangge” platform can also provide better guarantees for after-sales maintenance compared to parallel imported cars. Once certain key components need to be replaced, General Motors’ own platform has more obvious technical and cycle advantages.If General Motors can provide more discounts or other tailored solutions for exchange of same-brand used cars to old customers of SAIC-GM, it can achieve the maximum win-win situation between “Delang” and the existing SAIC-GM.

Based on the “Delang” platform, General Motors can also explore some new businesses:

First, the “direct sales” model, which is played by some new energy vehicle companies with a flourish like Tesla.

The benefits of the direct sales model are self-evident. It can directly communicate with customers, eliminate all kinds of unprofessional behaviors of dealers, avoid various kinds of procrastination and buck-passing, and respond to customers’ demands in the first time. At the same time, the whole vehicle enterprise can directly communicate with users, master first-hand data and information.

As software-defined vehicles become mainstream in the market, data during the user’s entire life cycle of vehicle use will become the biggest basis for iterative updates and scientific decision-making of automakers.

Currently, GM is transforming to pure electric on the basis of the Ultium platform.

As the main production enterprise of General Motors in China, the first and foremost goal of SAIC-GM is certainly to fill the gap in large sub-segments of the domestic market and improve sales volume when selecting domesticated models on the Ultium platform.

In this case, the sub-segments that the “Delang” platform needs to cover will not become the scope of consideration for SAIC-GM. Therefore, by continuously enriching the “Delang” platform, it can also form a relatively good complementary relationship with SAIC-GM’s existing models.

After all, for a car company like SAIC-GM with a very complete system, the investment cost is not small whether it is early-stage research and development certification, mid-term factory production, or later-stage marketing promotion.

If the sales volume of the model put into the market is small, it is difficult to amortize all kinds of investments in the early stage. In this case, SAIC-GM may not necessarily invest its resources in relatively small-volume models.

This is evident from the imported car models scattered in the 4S dealerships of the three major brands under SAIC-GM, which do not attract much market attention.

Building “Delang” is not an easy task

Building a brand-new sales platform or marketing channel is never an easy task.

The biggest challenge that Doronje faces is the potential sales volume that high-end imported cars can provide.

While there are no R&D and manufacturing investments involved in importing whole cars, operating a brand new brand and building both online and offline channels come at a high cost, especially when it comes to building offline channels or delivery centers.

Referring to the practices of Tesla or Weixiaoli in laying out storefronts in the city centers of first- and second-tier cities, it also requires a large sum of investment. Not to mention the promotion of a completely new brand like “Doronje” in China, which requires a long-term and extensive investment of resources.

The last thing that needs to be balanced is the relationship between the platform of Doronje and SAIC-GM as well as its dealers.

For foreign car companies, seeking an increase in its shareholding ratio is an unmistakable topic after the relaxation of the equity ratio restrictions on joint venture carmakers in China.

However, considering its close ties with SAIC and the latter’s dominant position in the domestic market, it is almost impossible for General Motors to increase its shareholding ratio in joint venture carmakers in the short term. In this case, high-end imported cars will become a completely new area for General Motors to obtain greater benefits in China.

At the same time, with the upgrading of domestic consumption, SAIC-GM itself certainly hopes to realize continuous upgrading of products and brands. Whether in terms of improving brand appeal or further expanding terminal sales, SAIC-GM will certainly not be satisfied with the existing product lineup.

When the time comes, how to reconcile the interests of both parties and seek the greatest win-win situation will also become a difficult problem for the Doronje platform.

Summary

On the automotive stage in China, General Motors has always taken advantage of the domestic market with its flexible and grounded strategies.

From the earliest establishment of the domestic joint venture’s technical center to accelerate the localization process, to using its domestic factories to export whole vehicles and engines to overseas markets, to the Pan-Asia Automotive Technology Center in China leading the global small-sized vehicle project, etc.

The series of measures aimed at enhancing China’s global business participation have provided General Motors with the opportunity to fully benefit from the development of the domestic auto market.

While China’s auto industry has bid farewell to the double-digit growth of the past, opportunities still exist to tap into potential blue ocean markets. Among them, high-end imported cars are seen as a “new continent” by foreign automakers.

On the one hand, due to the appeal of the brand or the lack of technological reserves, domestic independent brand automakers are unlikely to enter this niche market in the short term.

On the other hand, with the expansion of the high-net-worth group in China and the increasing purchasing power of the individuals, their pursuit of high-end imported vehicles, which are more personalized, will also increase day by day.

Under such circumstances, General Motors has taken the lead in China to create a high-end imported car platform “DoLangGe”, which has laid a solid foundation for the large-scale introduction of relevant models and the establishment of a high-end brand image in the future.

Once the “DoLangGe” platform is recognized by the Chinese people, other luxury automakers such as Volkswagen, Toyota, and even BBA will follow General Motors’ footsteps and inject more resources into their imported car businesses.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.