GM CEO Mary Barra confirms $14 billion investment in China through 2018

On her visit to the 2015 Shanghai Motor Show, General Motors CEO Mary Barra discussed the long-term potential of China’s automotive industry and reaffirmed GM’s investment plans for maintaining its growth in its largest market.

The manufacturer has 11 joint ventures, two wholly owned foreign enterprises and more than 58,000 employees in China. Passenger cars and commercial vehicles are sold under the Baojun, Buick, Cadillac, Chevrolet, Jiefang, and Wuling brands.

China has been GM’s largest market for the past five years and the world’s largest vehicle market for the past six. Last year, China accounted for more than a third of the company’s global sales. On April 9, GM reached 1 million unit sales in China for the ninth consecutive year and the earliest in its history.

“China is playing a vital role in GM’s global success in all areas of our business,” said Barra. 

According to Barra, GM expects continued market growth of around 6 to 7 percent annually through 2019. “Rising household incomes have made passenger vehicles affordable to a growing number of people across China,” she said. “And now we are seeing a growing number of repeat and replacement buyers.”

These customers, who currently represent about 30 percent of passenger vehicle buyers, are expected to account for 70 percent by the end of this decade.

Barra added, “Our brands, including Chevrolet, Cadillac and Buick, offer various sizes, styles and price points to meet the needs of buyers who are purchasing a second vehicle or looking to ‘trade up’ to larger or more luxurious vehicles.”

To maintain its growth in China, GM is in the process of investing $14 billion (Rs 88,438 crore) in new products, manufacturing facilities and other key areas of the business between 2014 and 2018.

In 2015, Buick is introducing two new models in China, its largest market. Chevrolet has 10 products on the way in the coming years in its second-largest market. Cadillac, which is one of China’s fastest-growing vehicle brands, will have several new models in China in the next few years. And Baojun, GM’s youngest brand in China, is adding a new SUV to its lineup of passenger vehicles this year.

“GM and our partners are investing significantly to expand the manufacturing capacity of Shanghai GM and SAIC-GM-Wuling,” said Barra. “This will allow our joint ventures to keep up with the strong demand for current and future models – and to do so through local production.”

This year alone, GM’s joint ventures are increasing manufacturing capacity by 24 percent. Among the facilities opening in 2015 is Shanghai GM’s new base in Wuhan that is initially building Buick models. By 2018, GM expects to have 5 million units of annual capacity in China.

GM is also expanding the dealer networks for all of its brands, with a focus on central and western China – where the majority of growth is taking place. In addition, it is increasing the scope of its entire value chain, including financing, onboard telematics and insurance. 

Also read:  GM sells 2.4 million vehicles worldwide in Q1 2015