GM's Manchester United Strategy: The Goal Is China
Business + Economy

GM's Manchester United Strategy: The Goal Is China


The joke practically writes itself: General Motors is leaving American football for real football. The American automotive giant, which earlier this month said that it would drop advertising during the Super Bowl, announced today yesterday that it is entering into a five-year sponsorship deal with English Soccer juggernaut Manchester United.

The company that once told Americans to “See the U.S.A. in your Chevrolet” is now clearly aiming for different drivers.

The affiliation with ManU brings plenty of prestige.  Last year, the club surpassed Liverpool as the "winningest" team in the British Premiere League by clinching its 19th title. (It lost the championship this season to local rival Manchester City, but the teams were equal on points, marking the first time the BPL had been decided on a tie-breaker). But why pull out of America's biggest sporting event to sponsor a team located in a country smaller than the state of New York?

The answer to that lies in Man U's global appeal – and especially in the growing explosive following the Man U’s Red Devils , as the team is known, has in Asia and particularly in -- especially China. Manchester United is the world’s most popular football club, with an estimated 659 million fans and followers (doubling in the last five years, largely due to an intensive Asian market push).  Forbes and was recently named by Forbes magazine asit the most valuable sports club in the world. Nearly one in 10 people in the world claims to be a fan of the Red Devils.

While GM accounts for only 0.9 percent of new vehicle registrations in the U.K., it is already the top-selling foreign automaker in China. “The global fan base we have and the media exposure we generate on Chinese media channels are huge,” Manchester United’s Richard Arnold said, according totold Advertising Age. “We have 108 million followers in that part of the world, so it’s a powerful mix, one that western companies use to drive brand affinity.” It’s no coincidence that, in conjunction with the sponsorship deal, Man U will be playing two off-season “friendly” matches in China this summer in what will be called the "Chevrolet China Cup."

GM’s success in China was thwarted recently when the company tried to sell its electric car, the Chevy Volt.  Beijing authorities agreed only if GM agreed to share three of the car’s key technologies—the electric motor, electronic controls, and the batteries that store the electric power.  Fiscal Times columnist Patrick Smith wrote,  “Simply put, unless GM discloses what amounts to trade secrets, the Volt won’t qualify for nearly $20,000 in subsidies that China provides for other electric-powered cars,” putting GM at a clear disadvantage.The company is no doubt hoping that uniting its brand with Man U will have a positive impact on both Chinese consumers and officials.

GM’s marketing chief, Joel Ewanick, has made clear he’s looking to make the company’s advertising more efficient – a big reason the carmaker decided to stop advertising on Facebook – and the numbers behind this move are obviously compelling in that regard.

Manchester United’s big game against Manchester City this month drew a global audience that “scaled to 600 million people,” GM’s executive director of global marketing strategy said Thursday. “Compare that to the Super Bowl here in the States, which is roughly 110, 115 million, and you’re talking five times that audience watching one regular-season game. It’s significant.”

With GM's recent moves to market both the Malibu, and perhaps more importantly, the Volt in China, it's clear that when the company says "Global Market", its first shot on goal will be China.