GM Asian Efforts to Continue

TOKYO, Oct 20, 2003; Michael Ellis writing for Reuters reported that General Motors Corp. Chief Executive Rick Wagoner said on Monday that GM's partnerships with Japanese automakers had not always worked as planned, but they had been profitable and work would expand.

Over the years, GM has had to write off its stake in Isuzu Motors Ltd., Japanese sales of its Chevrolet Cruze made by Suzuki Motor Corp. have been weaker than expected, and its stake in Subaru parent Fuji Heavy Industries Ltd. has lost value.

"Everything doesn't always work out as you plan," Wagoner told reporters at a press briefing with GM's Japanese partners in Tokyo. "Actually, we've gotten, frankly, very good returns," he added. "We feel like these are good investments for our shareholders."

GM and the three Japanese automakers will work together in the future to broaden their relationship, Wagoner said.

As part of GM's strategy to expand its Chevrolet lineup in Japan, GM will sell at Suzuki dealerships next year two sedans made in South Korea by GM Daewoo Auto & Technology Co., which is 45 percent owned by GM and 15 percent owned by Suzuki.

The Chevrolet Epica mid-size car and the Optra large car, based on GM Daewoo's Lacetti and Magnus cars, will be the latest vehicles exported from GM Daewoo, the one-year old automaker formed from the ashes of bankrupt Daewoo Motors.

GM has tried, and failed, for years to crack the tough Japanese market, often with American-made cars. "Over the years, I've announced a lot of different strategies, and I think this is the one that has the highest probability of working, which is recognizing that we have to rely on some local products," Wagoner said.

"We have to face the fact that, by and large, the products sold here are quite different than those that are demanded by U.S. consumers," he added.

The project also helps GM Daewoo, which has aggressively expanded exports to overseas markets from South Korea to fill excess capacity as it struggles to return to profitability.

GM is also talking with Subaru parent Fuji Heavy Industries (FHI) on how they can expand their relationship, Wagoner said. Fuji will begin manufacturing and selling next spring the Saab 9-2X, a turbo-charged sports sedan based on the Subaru WRX all-wheel drive car. Saab and Subaru are also working together on other projects, Wagoner said.

"Going forward, we believe that the collaboration of FHI and Saab automobile will be the cornerstone of the GM-FHI," Wagoner said. "And beyond that, we're going to continue to explore new cooperation in powertrains, overseas distribution and manufacturing."

Fuji Chief Executive Officer Kyoji Takenaka said that working with Saab will help Subaru's desire to become a premium brand in the market.

GM is also working with Isuzu in China to see where they can collaborate on the growing commercial truck segment, Wagoner said. He said the two companies will announce more details later, when they finalize a plan.