General Motors comes on strong in Iraq 21 years after war derailed market prospects
A caravan of GMCs winds through Jordan. General Motors sees the Mideast, including countries like Iraq, as a market with huge potential for growth. (GM)
It's a mostly forgotten story, but GM once planned to build a factory in Iraq. And it's a mostly obscure statistic, but the company has finally started moving the metal there.
As former GM executive Warren Browne recalls it, the factory was going to produce mid-sized cars, probably Malibus. To hustle the project along, there were five dozen Iraqi engineers working at company headquarters in Midtown.
Every project has its little speed bumps, though — like in this case, massive bombing raids. Twenty-one years ago today, two days after the first air assault of Gulf War I, Browne came back from watching Wolf Blitzer at lunch and asked, "Where are the Iraqis?"
They'd been sent home, or at least sent someplace besides here. The factory remained plastered to a drawing board, and GM remained a minor player in the Iraqi market … until deep into Gulf War II.
Now, sales are booming.
That's a relative term, especially in Saddam Hussein's old stomping ground. According to Browne, who's now a vice president at a Pennsylvania information and planning firm called AutomotiveCompass, total new vehicle sales for 2011 topped out around 115,000 amid a population of nearly 30 million.
Keep in mind, he says, that record-keeping in Iraq can still be sketchy. But keep in mind as well that in 2004, a year into the war and resulting chaos, total sales were only 25,000 — and that 30 years ago, GM even trailed Renault.
"It's interesting," Browne says from his home office in Northville. Not life-changing or heart-stopping or mind-altering, but yes: not what you'd expect to see. In a country where Hyundai, Toyota, Nissan and Volkswagen used to rule, GM is No. 1.
Region pitched for growth
The total for the year was upward of 35,000 — mostly SUVs and pickups, but also some sedans from Chevrolet and Cadillac.
Overall, GM's Middle Eastern skies were sunny. While the company did not have specific numbers at hand for Iraq, the total sales of 139,431 for the region were an increase of 13 percent over 2010.
The Chevy Silverado was up 69 percent, the Tahoe jumped 43 percent, and Buick stayed at zero. It's not sold there.
Ford also has a presence in Iraq, on the highways if not statistically. Its pickups, purchased elsewhere, have been favored by civilian contractors.
"Our big markets historically in that region were Saudi Arabia, Kuwait and the Emirates," says Browne, 60, who had been managing director of GM Russia before he went 40-and-out in 2009. GM says it expects the Middle East to become one of the world's fastest-growing markets, and AutomotiveCompass concurs.
The company projects new car and light truck sales of 220,000 in Iraq alone by 2015, Browne says — though it's always important to remember that the brake pedal isn't far from the accelerator.
"The people I talked to in the region had a long list of qualifiers," he says, "civil war being one of them."
Drive at your own risk
Iraqi drivers do not have insurance, and kidnappers have been known to target luxury car drivers. But people with money tend to spend it; when USA Today looked into the used-car market in Baghdad three years ago, the young show-offs were buying used Hummers.
A few years before, an even more ostentatious demographic had favored Mercedes-Benz. Those were the more uptown Baathists, the close supporters of Mr. Hussein — and they don't seem to be in the market anymore.
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