General Motors announces 5-year growth strategy for China

General Motors’ president Dan Ammann and GM executive vice-president and GM China president Matt Tsien today announced the company’s strategy for the next five years to fuel its growth momentum in China.

The strategy will provide an even stronger product mix, greener technologies and smarter solutions for personal mobility in the world’s largest vehicle market.

Between now and 2020, GM and its joint ventures plan to roll out more than 60 new and refreshed models in China, including 13 this year, with a strong focus on SUVs, MPVs and luxury vehicles.

Continued strong demand by customers generated record vehicle deliveries, which helped China remain GM’s largest market. Last year, China accounted for more than one-third of the company’s global deliveries. GM expects China’s vehicle market to increase by 5 million units or more by 2020, representing growth of about 3-5 percent annually.

“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.”

Targeting higher sales in SUV, MPV and luxury segments
GM is anticipates about 4.2 million units of growth in China’s SUV, MPV and luxury segments through 2020, with the industry’s luxury segment expected to generate compound annual growth of more than 10 percent during that period.

To capitalise on this trend, about 40 percent of the new vehicles that GM launches in China over the next five years will be SUVs and MPVs, and GM’s Cadillac luxury brand will introduce 10 new and refreshed models.

During the same period, GM and its joint ventures will roll out more than 10 new energy vehicles under the Chevrolet, Buick, Cadillac and Baojun brands. They will include the Shanghai-built Cadillac CT6 Plug-in Hybrid Electric Vehicle, which will go on sale later this year.

The China market will also 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.

Focusing on growth markets and value-added services
“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.”

GM announced last July that it will invest $5 billion (Rs 31,585 crore) over the coming years in a family of vehicles for global growth markets. Working with its Chinese partner SAIC, GM will replace several current vehicles for growth markets based on multiple architectures with an even larger family of vehicles based on one core architecture.

In addition to vehicles, GM is also addressing business opportunities in value-added services such as automotive financing and insurance.

Its SAIC-GMAC joint venture is the largest dedicated automotive finance company in China. By the end of this decade, GM says it sees potential for up to 40 percent of car buyers in China to finance their purchases, compared to about 30 percent in 2015.

The INSAIC joint venture will continue making it easier for customers to obtain insurance when purchasing GM vehicles. It will further channel vehicles to GM dealerships for repairs, providing customers additional peace of mind.

Investing in the future of personal mobility
At the same time, GM is executing a plan to capitalise on the future of personal mobility using tools such as connectivity, ridesharing, car sharing and autonomous driving.

GM holds nearly 500 connectivity patents and has been the industry leader for two decades with OnStar. By the end of 2016, GM will have 12 million OnStar-connected vehicles on the road. And by 2020, more than 75 percent of its global sales volume is expected to be actively connected. In China, all Cadillac, Buick and Chevrolet models will be connected by 2020.

Earlier this month, Shanghai OnStar and the Midea Group announced a unique strategic partnership for the integration of onboard telematics and smart household technology to enhance the consumer experience.

GM recently announced a long-term strategic alliance with Lyft to create an integrated network of on-demand autonomous vehicles in the United States. GM will invest $500 million to help the company continue the rapid growth of its successful ridesharing service.

In January of this year, GM started its own personal mobility brand called Maven, which combines and expands the company’s multiple car-sharing programs, including the EN-V 2.0 pilot program with Shanghai Jiao Tong University.

The company followed that up earlier this month, when it announced the acquisition of Cruise Automation to add Cruise’s deep software talent and rapid development capability to further accelerate GM’s development of autonomous vehicle technology.