GM and Partners Investing $16 Billion on New Products for China

Focus on energy-efficient models.

by on Apr.20, 2015

Shanghai GM will invest $16 billion over the next five years to develop 10 all-new or upgraded models.

Struggling to remain on top in the increasingly competitive Chinese automotive market General Motors and its partners plan to invest $16 billion over the next five years to develop 10 all-new or upgraded models.

The focus will be on so-called “new-energy models,” including both conventional and plug-in hybrids the maker announced during a meeting with reporters at the Shanghai Motor Show on Monday. Chinese regulators have been pressing the industry to reduce fuel consumption and migrate to battery-based drivetrains in an increasingly desperate effort to reduce the country’s worsening air pollution problems.

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“In terms of new energy, we are keen on power efficiency and emission control and are ardent to go electrical throughout our portfolio,” said Shanghai GM President Wang Yongqing.

Also known as SGM, it is a joint venture of GM and its largest Chinese partner, Shanghai-based SAIC. Along with several other partners, General Motors has been one of the largest automotive manufacturers in China for the last 15 years, though it has recently slipped into second place behind German rival Volkswagen AG.

Nonetheless, Wang noted that both the Buick and Chevrolet brands are expected to sell more than 1 million vehicles each in China by 2020, with GM aiming to capture an overall 10% share of what has become the world’s largest carmaker. But GM will have to face off against an increasingly aggressive assault from not only VW, but also competitors such as Ford, Toyota and Hyundai.

(Chevrolet debuts driverless future with FNR concept in Shanghai. For more, Click Here.)

The total investment of 100 billion yuan, or $16 billion, will include not only those 10 new or updated models, but a variety of new powertrains. SGM now has 13 new engines and nine new transmissions “in the pipeline,” according to Wang. These include various hybrid systems, as well as downsized and turbocharged gas and diesel engines, he noted.

GM previously announced plans to spend $14 billion between 2014 and 2018 to develop new products. The increased investment reflects the tougher market challenges the maker is facing.

(Click Here for details about GM cutting prices on the Chevy Spark EV.)

“Our five-year business plan to 2020 will have 100 billion yuan invested in new products and plants to make sure that we meet the China consumers” needs,” John Stadwick, vice president of sales, service and marketing for Shanghai GM told reporters ahead of the Shanghai auto show.

By the time the new program is complete, GM officials said, they expect to offer about 40 new models in the Chinese market. China has been experiencing a rapid proliferation of new vehicles, many targeting new market segments.

(To see more about Cadillac’s confirmation of a CT6 hybrid, Click Here.)

But the government is hoping to see some of the biggest growth come from vehicles using low or zero-emissions powertrains. More than a dozen cities, including Shanghai and Beijing, now restrict the number of new vehicles that buyers can register each month. But plug-ins and pure battery-electric vehicles generally can sidestep such limits.

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3 Responses to “GM and Partners Investing $16 Billion on New Products for China”

  1. robb Lee says:

    In your article, you state that GM has a JV titled: SGM; “a joint venture of GM and its largest Chinese partner, Shanghai-based SAIC.” However, you fail to mention Wuling Motors; a Chinese company who plays a very significant role in the JV.

    • Paul A. Eisenstein says:

      Hi, Robb,

      That wasn’t meant to be a complete list of GM’s Chinese joint ventures. Yes, GM…and SAIC…are also partnered with Wuling. But the new investment program is focused on SGM.

      Paul A. Eisenstein
      Publisher, TheDetroitBureau.com

  2. nobsartist says:

    I guess it’s o.K. to screw the American taxpayer out of 10 BILLION since they are going to invest it in China.

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