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Innovating In China’s Automotive Market: An Interview With GM China’s President

Innovating In China’s Automotive Market: An Interview With GM China’s President

In the recent interview, by Glenn Leibowitz and Erik Roth, GM China’s president talks about how China is the biggest market for GM. Innovation by commercialization is the country’s strength, says Kevin Wale, President, MD, GM China. Is China really headed towards innovation in the automotive industry? General Motors is investing heavily on innovation in China. In fact, since 2010; China has become the biggest market for GM. This is evident from the fact that she successfully sold 136,000 more cars in China in 2010 than in USA. In September 2011, the company’s Advanced Technical Center was opened in Shanghai which will comprise of technical and design organizations. The facility will pursue R&D for GM’s operations worldwide.

Tapping into China’s innovation is a high priority for the whole of GM. Recently, Wale discussed the state of automotive innovation in China and how GM’s talent cultivates it. Kevin Wale talked with Quarterly, and
gave a deep look into GM’s plans in China which led to some revelations.

Understanding innovation in China is very important. There’s a natural development across all of China’s industries. People cannot understand that there’s a lot of innovation until they live in that environment. You can tell people, but they don’t understand. Massive numbers of skilled people want to be involved in technical development. There are a lot of people who want to make their mark in life.

Talking about the innovation by the automakers, Kevin said that technical innovation is lagging behind the rest of the world in maturity. The country doesn’t have the same research capability that the rest of the
world has. What China does better than any place else in the world is commercialization. The Chinese have a different way of doing innovation, something that the rest of the world does not know. The same technique has been adopted by the automakers in China. The Chinese system supports the idea of taking risks as long as you’re moving forward. That is why innovation through risky changes has worked in China. In China, GM plans to follow the model of innovation through commercialization. In China, we’re going to lag behind if we
don’t innovate. We have to jump into the market and identify the opportunity.

We have reached the conclusion that the opportunities exist in this market, and we have been able to do many things at very low costs. We have been able to manage innovations, while maintaining the international
standards. This has given us a competitive advantage

When asked as to how one can acquire the talent to meet these needs, Kevin Wale answered that GM had mixed the talent available locally, and the required expertise is also brought by GM’s partners. They have
also hired people from different places to meet their requirements. There is a process in place to educate people who work with GM.

GM has made some structural changes in the working set up by introducing small workgroups consisting of four to five members who jumpstart their jobs. These groups have executed their responsibilities in an excellent manner. Another factor for this success is the selection of team leader. A team leader must be flexible, tough, smart, and creative. He should be able to build great relationships, should have terrific persistence, and should be able to take calculated business risks.

In general, staff retention has been a problem for companies which come from the West. Kevin Wale told that they had thought about this problem, but it did not affect GM. People were put on other jobs, and most of
these people are learning quickly as opposed to their own expectations and amazingly they are performing better than they thought they were capable of doing. They seem to be quite satisfied.

Kevin confirmed that GM had built R&D center in China. The aim was to use the services of young, energetic and fresh graduates coming out of the universities. The other factor was to do the R&D close to the biggest market in the world where the activity is carried out amongst people who understand language and culture around them. GM is also planning to build an advanced design center in China so that they have the basis for future creativity in the country. For talent sourcing of this center, GM is lucky to have excellent local connections with the universities. GM has also employed a Chinese head of the R&D center. GM is als providing internship to obtain best young talent. The plan is to make the center up and running within 5
years.

Kevin happily affirmed that they were following the rule that if there was a requirement to innovate then they would do that and there was no requirement, they wouldn’t. GM has been very successful by launching
some vehicles with changes as per the requirements of local market. GM always encourages the suppliers to share with them their ideas. This is what has resulted into incorporation of local technology in their cars.

Note: The preceding is a summary of an article found though our research, and is provided here with editorial comment for members only. Please see the full article at the following link for full original content. http://www.mckinseychina.com

The New Asia Innovation Team

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