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While General Motors () stumbles in the U.S., its Chinese operations are surging. This year, GM China's vehicle sales are expected to grow by 20%.
That's thanks in large part to GM's ability to get the right vehicles targeted to specific customer groups into the market. While the company has yet to design a production vehicle from the ground up specifically for China, GM now makes substantial changes to many of the cars it sells in the mainland. Overseeing that process is James Shyr, a veteran designer who studied at Art Center College of Design in Pasadena, Calif., and who was hired away from Nissan.
Shyr recently sat down with BusinessWeek Asia Editor David Rocks to talk about the importance of design these days in China. Edited excerpts of their conversation follow.
In the past, design in China wasn't that important. Is that changing, at least in the car business?
Design has become a major differentiator now. If you have $20,000 to spend, there are a lot of cars you can choose from. So if the cars' quality and performance are similar, the only differentiator will be the styling and design.
What are the elements of design that are important in China?
Early on, a lot of cars here were sold to executives who get driven around by chauffeurs. That means cars need to be more rear-seat focused. And they like a warm interior, a beige or a tan.
Can you give me a specific example from a car you've adapted for the Chinese market?
The 2005 Buick GL8 was first developed in the U.S. as the Oldsmobile Silhouette and the Chevy Venture. In the U.S., they're considered family vans, but when it gets to China it becomes an executive van.
But we had to make some changes. The interior has to be more formal, more luxurious. In the U.S., I'm sure some of the thinking on the interior was the ability to repel dirt after soccer practice. We're not thinking about that. We're thinking about how a businessman can sit comfortably.
Our intent is to move the image away from a minivan and make it more sedan-like -- but apply it to a minivan architecture. The front face of the car becomes a big part of the design inspiration. One of the key requirements of an executive car is you have to see it from far away.
Do you expect to develop a car entirely in China anytime soon?
We don't have any plans to do that. From a corporate standpoint, we've got many global architectures, so why reinvent the wheel? To develop a platform costs a lot of money.
Though you haven't designed any production models from the ground up here in Shanghai, you recently developed a concept car called the ALA. Can you describe it?
It's a sedan with a tall stance, with all the positive attributes of a minivan and an SUV. We try to to insert some Chinese cultural elements. If you look at it from the tail view, you can see the roof of a pagoda. With each view, you get a different impression.
How do you design for different markets -- let's say rural China vs. Beijing?
We talk to a lot of people. We have a diversity of customer demographics in our heads. For example, the Wuling is a little, economical, very Chinese microvan. Some of us flew to Guangxi and talked with the people who are actually using the car because we can't just sit in Shanghai and design cars for people so far away. So we talked with drivers, sat down on the curbside, and smoked with them. We went to dealers, even rode with the owners to their houses. They were very surprised that someone from a big company would actually visit their homes.
What did you find out?
We discovered they use their microvans for running around the countryside, from Monday to Friday, to take their goods to the markets. But on weekends they clean up their cars and put seat covers on. They make them look like they've never been driven through mud before and take them on outings with their families.
That had a very big impact on us as designers. We're sitting in Shanghai, and we say, "Let's make the car as luxurious as possible, give it a beautiful interior." And guess what: That's not what the customers want. I asked them what they want for their next car. They say they want better air conditioning, bigger volume inside.
Do you get the sense that they really care about good design?
They do care about design. What they drive now is a box, and we think they'd like something more streamlined. They can tell the difference between a good car and an ugly car.
Will it cost you more to make good-looking cars?
Design doesn't cost any real money. Whether you make a Cadillac shape or a Lamborghini shape, the cost difference isn't that much. Still, you're not going to have a very fancy design for a rural area. They'd worry about how they're going to keep the car clean. Design is about problem solving.
What's next for your designers?
The next step is building up brand equity in China. We want our design to have a consistent character. The first stage was to know what are the preferences of the people in China. Now we can go to the next step -- a consistent exterior and interior look and the quality. Then you go to the next stage, the sustainability of the brand, where you focus segment by segment and provide a car for everyone in China. The design of each Buick has to say it's a Buick, but it also has to fit into its segment.
Do you anticipate a time when some of the design work that's done in the U.S. will come here for cost reasons?
I don't see that. It's important to have a local design center. You have to be on the ground here to be with the people you're going to sell the car to. Design isn't very easily transferred. There's a lot of culture involved. And we can barely fulfill our obligations to the local market here.
You could hire more people.
Every designer you hire here you need to train for three years before they can design components for cars. We have enough to do here. I'm not saying we don't want to help our colleagues in North America, but we don't know how to do it. EDITED BY Edited by Patricia O'Connell