BEIJING – General Motors’ strategy in China over the next five years will be centered on a stronger product mix, greener technologies and smarter solutions for personal mobility.
GM President Dan Ammann and GM Executive Vice President and GM China President Matt Tsien announced the U.S. automaker’s version of the “13th Five-Year Plan” at a press conference here on March 21.
It will see the company add a significant number of new products in the SUV, MPV, luxury and new energy vehicle segments, expand to growth markets outside of China, provide more value-added services, and invest in the future of personal mobility with Chinese businesses and academic institutions, among others.
Highlights of the strategy include:
- Introduction of more than 60 new or refreshed models across its Chevrolet, Buick, Cadillac and Baojun brands between now and 2020, including 13 this year;
- About 40 percent of the 60 vehicles will be SUVs and MPVs;
- 10 new or refreshed models from the Cadillac brand;
- 10 new energy vehicles under the Chevrolet, Buick, Cadillac and Baojun brands, including the locally-built Cadillac CT6 Plug-in Hybrid that will go on sale later this year;
- Working with Chinese partner SAIC on a new vehicle architecture that will result in products with annual sales of 2 million units for growth markets, as part of GM’s $5 billion investment in a family of vehicles for global growth markets announced last July;
- Address business opportunities in value-added services such as automotive financing with the SAIC-GMAC financing JV and insurance with the INSAIC JV;
- All Cadillac, Buick and Chevrolet models in China to be connected by 2020;
- Unique strategic partnership between Shanghai OnStar and Midea Group for the integration of onboard telematics and smart household technology to enhance the consumer experience;
- Combine and expand multiple car-sharing programs including the EN-V 2.0 pilot program with Shanghai Jiaotong University (which has achieved 1,000 rentals per month) through GM’s own personal mobility brand Maven.
The announcement comes on the heels of a slew of moves GM has taken so far this year as it expands its mobility services, such as the investment in ridesharing company Lyft, start of its own car-sharing program Maven and most recently the acquisition of Cruise Automation to accelerate development of autonomous vehicle technology. It also comes after a record 2015 in China, where the company sold 3.6 million vehicles including more than 2 million by joint venture SAIC-GM-Wuling and more than 1 million Buicks, in a market that Tsien described as a “new normal.”
But despite that “new normal,” Tsien is confident that China’s vehicle market will increase by 5 million units or more by 2020, representing growth of about 3-5 percent annually. Of those 5 million, about 4.2 million will be SUVs, MPVs or luxury vehicles, with the luxury segment expected to grow more than 10 percent a year.
“GM is very well positioned to participate in this growth,” said Tsien. “We will continue to focus on the segments where the demand is strong and growing. This has been a key to our success from day one.”
“Our core business of selling great vehicles today is what will fund our investment in tomorrow,” said Ammann. “The China market is maturing and it will still be a tremendous source of growth for us in both the short term and the long term.”
He believes China will benefit from GM’s global initiatives to accelerate the refreshing of its portfolio. This year and in each of the next few years, 40 percent of the company’s global sales are expected to come from new and refreshed models, up significantly from 25 percent in 2015. Several of these vehicles will be developed, built and sold in China.
“We will continue to significantly strengthen our engineering and development capabilities in China, the most comprehensive operation of any car company in the world,” said Ammann responding to a question from CBU/CAR on the role of R&D in the five-year plan. “New vehicle families that we are developing for growth markets around the world will utilize our R&D joint venture PATAC.”
“The industry will change more over the next 5-10 years than it has over the past 50 years,” said Tsien. “As GM’s largest market and the world’s largest vehicle market, China should also be the driving force for that change. We look forward to working with the Chinese government, the academic and business community, and our partners to shape the future of transportation.”