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  April 22nd, 2015 | Written by

GM Eyes China Market With Joint Venture

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  • General Motors will develop new vehicles “suited to Chinese tastes” with China-based joint venture.
  • Shanghai General Motors to introduce 10 environmentally friendly “new-energy models” for Chinese market by 2020.
  • China Market Showdown: Toyota will invest $441 million into Chinese auto-production operations.

General Motors’ China-based joint venture says it will spend more than $16 billion over the next five years to develop new vehicles “suited to Chinese tastes.” The plan calls for Shanghai GM (SGM), a joint venture between Detroit-headquartered General Motors and SAIC Motor Corp., China’s largest auto group by sales, to invest in designing and producing 10 new or upgraded models annually until it has roughly 40 product lines. The investment will fuel a campaign to corner at least 10 percent of the Chinese market, the company says.

Significant research and development, says SGM, will go into producing environmentally friendly vehicles, including 10 “new-energy models,” such as traditional and plug-in hybrids, by 2020. The new designs are expected to cut fuel consumption from current levels by 25-30 percent. SGM reportedly has 13 new engines and nine new transmissions “in the pipeline” and plans to expand use of small-displacement, direct-injection and turbo engines, introducing diesel engines.



Announcement of the company’s plans were made public at the opening yesterday of the 16th Annual Shanghai International Auto Industry Exhibition. Last year, parent GM said it would invest $14 billion in China through 2018. But the company isn’t the only major international automaker with long-term plans to expand its share of the ballooning Chinese auto market.

Germany’s Volkswagen and Hyundai of Korea have both announced plans to expand production capabilities in the country. At the same time, GM arch-rival Ford says it spend upwards of $5 billion on new production facilities and design development this year. Most recently, Japanese auto-producing giant Toyota said that it would pump more than $441 million into its Chinese production operations.