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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. (more…)

Three Chinese Automakers Expect to be Global Players

Industry official predicts exports to emerging markets.

by on Oct.16, 2014

The Geely Gleagle is one of the products that makes Chinese government officials believe three Chinese automakers will be globally influential.

China’s fast-growing automobile industry should be able to create at three strong globally competitive carmakers in the years to come, according to a Chinese government official this week.

Wang Xia, a senior official with the China Council for the Promotion of International Trade Automotive sub-council, acknowledged during a press conference prior to the opening of the Global Automotive Forum in Wuhan, China, that China’s homegrown auto industry has been rocked over the last several months by a steady loss of marketshare.

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Up until about two years ago, Chinese brands held about 46% of the domestic sales across China. Since then, the Chinese domestic brands have lost about 10 points of marketshare to foreign brands. The big winners have been European brands as well as General Motors and Ford. (more…)

Auto Interior Behemoths Merge in Joint Venture

Johnson Controls spins off business to Chinese-owned company.

by on May.19, 2014

Alex Molinaroli, left, Johnson Controls chairman and chief executive officer, and Shen Jianhua, Yanfeng chairman, seal the deal on their new joint venture.

In a deal that is emblematic of how the rapid growth of the auto industry in China is changing the landscape, Johnson Controls is spinning off part of its collection of automotive assets to form a new joint venture with an expanding Chinese company that will focus on automotive interiors.

JCI and Yanfeng Automotive Trim Systems Co. Ltd., a wholly owned subsidiary of Huayu Automotive Systems Co., Ltd. (HASCO), the component group of Shanghai Automotive Industry Corp. (SAIC), announced they had signed a definitive agreement forming the new venture where Yanfeng will hold a 70% stake and JCI the remaining 30%.

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The noncash transaction creates the largest automotive interiors company in the world with annual revenues of approximately $7.5 billion. (more…)

China’s Largest Automaker Opens Detroit Office

Could SAIC eventually target U.S. market?

by on Jul.02, 2012

Chinese automaker SAIC opens a new outpost in the Detroit suburbs.

China’s largest automaker has opened a new outpost in the Detroit suburbs to build closer ties with one of its principal partners, General Motors  – as well as some of the other North American automakers and suppliers.

Shanghai Automotive Industries Corporation USA Inc. expects to have 100 employees in its new operations center in Birmingham, Michigan, one of Detroit’s principal suburbs.  What that means in the long-term, especially with the Chinese expected to eventually target the American market, remains an unanswered question.

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Cooperation between U.S. and Chinese automotive companies is increasingly important in the new global automotive marketplace, SAIC Motor Chairman Maoyuan Hu said in a statement Friday.

Maoyuan said the opening of the new North American Operations Center in Birmingham marks an important step in creating a stronger ties between the US and Chinese automotive industries. With the increasing importance of cooperation between the major global automotive markets, this move by SAIC to strengthen its US presence is significant, he said.

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Chinese Car Sales Boom Keeps Even Weakest Makers Afloat

Government still hopes for a shake-out of domestic brands.

by on May.02, 2011

Geely - its IG Concept shown here - is considered one of the likely winners in a shake-out of Chinese domestic automakers.

The long-awaited consolidation of the Chinese auto industry is on hold.

While foreign brands, like Buick, Volkswagen and Toyota, may get much of the attention, there are hundreds of smaller, domestic automakers vying for attention and the dollars of China’s new automotive buying class.

Government leaders – along with those foreign makers and industry analysts — have been hoping to see a shake-out of some of the least viable of those home-grown brands.  But like the bumblebee, the structurally unwieldy and inefficient Chinese auto industry continues to fly.

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The fact is the boom in car sales over the last three years has bolstered the cash flow of smaller, weaker companies that have blossomed over the years and which continue to sell cars and trucks in sufficient numbers to continue to operate, according to western executives familiar with the rapid growth of the Chinese market. None of the smaller companies have more than 2% to 3% of the market but with Chinese sales topping 18 million last year, and expected to surge past 20 million in 2011, the volume is sufficient to stay in business.

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Chinese Buick Could Be Precursor for GM’s Reentry in U.S. Minivan Market

GM will launch new GL8 minivan on Nov. 28.

by on Nov.10, 2010

General Motors will launch the Buick GL8 for the Chinese market on Nov. 28. Could it eventually make its way to the U.S.?

Maybe General Motors’ minivans aren’t extinct. They still live in China and are about to get a makeover. Could GM also be planning a reintroduction of the boxy people movers in the U.S.?

GM isn’t talking about U.S. plans for GL8 minivan, which it continued to offer in China, even after it stopped building them for the American market in 2008.

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GM offered just two paragraphs about its planned Nov. 28 introduction of the next-generation GL8, but it’s the pictures that tell the story.

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GM China Sales Top 2 Million For First Time

First maker to cross key milestone in a single year.

by on Nov.04, 2010

GM China President Kevin Wales.

General Motors set a significant milestone, last month, becoming the first automaker to ever sell more than 2 million cars in China during a single year, and giving the brand a nudge forward in its hard-fought battle to dominate the growing Asian market.

While car sales have “slowed” in China, in recent months, the numbers are still increasing at a double-digit pace and GM, in particular, recorded a 19.6% bump.  Falling just short of 200,000 vehicles, the month was an all-time record for the maker in what is now the single-largest national car market in the world.

“Over the past decade, China’s vehicle market has experienced unprecedented growth. GM has grown with it, working with our joint ventures to expand our lineup of vehicles and brands, adding to our portfolio of services, and increasing our production capacity to meet the changing needs of consumers nationwide,” proclaimed Kevin Wale, president of the GM China Group.

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The latest numbers come as a reminder of the maker’s controversial decision to enter the then-nascent Chinese market, 13 years ago.  Back then, few believed GM would be able to recover its initial investment in a new assembly plant to be built in the new, Pudon section of Shanghai.

As with other foreign makers hoping to tap China’s potential, GM was required to – and still must – partner with a domestic maker.  The original deal paired it with Shanghai-based SAIC, and their SGM unit saw a nearly 45% increase in sales last month.

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First Look: GM EN-V Concept

Meet Jiao (Pride), Miao (Magic) and Xiao (Laugh).

by on Mar.24, 2010

No word on the price or production plans.

Shanghai Automotive Industry Corporation  Group (SAIC) and its partner General Motors Company will show an electric vehicle concept at an exhibition in Shanghai at World Expo 2010 later this year.

So called, EN-V, short for Electric Networked-Vehicle, is a two-seat electric vehicle designed to “alleviate concerns surrounding traffic congestion, parking availability, air quality and affordability for tomorrow’s cities.”

Three EN-V models were unveiled today. They are said to represent three different characteristics that emphasize the “enjoyable nature” of future transportation – Jiao (Pride), Miao (Magic) and Xiao (Laugh).

These concepts will be showcased from May 1 through October 31 at the SAIC-GM Pavilion at World Expo 2010 Shanghai.

By combining GPS) with vehicle-to-vehicle communications and distance-sensing, EN-V concept can be driven manually or autonomously.

The Chinese auto market is the worlds largest and, unlike the U.S. and Europe markets it is still growing robustly.

EN-V’s platform has evolved from the Personal Urban Mobility and Accessibility (P.U.M.A.) prototype developed by Segway, which debuted in April 2009 at the New York Auto Show.      (more…)

Chinese Auto Market Grows to 40 Million Annually?

Annual vehicle sales to reach 30 million by the beginning of the next decade, 40 million at end. SAIC buys General Motors?

by on Jan.07, 2010

Big country, big population, big growth, and already the world's largest market.

The booming Chinese market will grow to 19 million units of annual sales by 2016, according to the experts from the global auto consultancy practice at PricewaterhouseCoopers.

That would make China the largest maker and consumer of vehicles in the more than 100-year history of the business.

Moreover, you ain’t seen nothin’ yet, at least according to some speculation by me and other sources.

If these pro-Chinese factions are right, the home market could reach 30 million units by 2020 or so, and barring a political upheaval – a genuine risk that virtually everybody acknowledges– it could grow to 40 million units by the end of that decade. Who knows?

This means that Chinese makers will be hard pressed to keep up with internal demand and most Chinese cars — except for maybe the odd few Geely or Chery models — will not be exported. Actually, given their current quality, I argue that  it would be better for established automakers if the Chinese did export large numbers of vehicles  right now. Remember the  Korean-built Hyundai Excel of the 1980s? It was so bad, except for the eastern European Yugo, that it set back Hyundai marketing in the U.S. for decades.

Many of the assumptions made about China are wrong, such as a coming Chinese export wave that enthralls media types and the opining classes, cautions Steve D’Arcy, a partner in PWC’s Global Automotive Practice.

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中国头号!

There will be no massive wave of exports emerging out of China because Chinese makers will barely be able to keep up with burgeoning demand. Hence the 19 million prediction for 2016. As Chinese annual income levels keep rising to equal an average vehicle price of 38,000 RMB or ~$5,600 for a basic car, D’Arcy sees now reason why China won’t remain the world’s largest auto market, he theorized at press luncheon in Detroit today.

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SAIC Takes Controlling Interest of GM Joint Venture

Automotive balance of power and jobs shift toward Chinese.

by on Dec.05, 2009

T

Click to enlarge.

Shanghai Automotive Industry Corporation and General Motors Company announced they are expanding their cooperation in Asia and targeting the Indian and other emerging auto markets by forming a Hong Kong-based firm, General Motors SAIC Investment Limited.

As part of the deal, the state owned SAIC is taking 51% controlling interest of Shanghai GM since cash-starved GM is selling 1% if its 50% share.

Though largely symbolic, it will be viewed as a setback for GM in Asian cultures, which put an emphasis on “face.”

It is also an indicator of how fragile GM’s financial condition remains  — in the latest quarter it lost $1.2 billion — as far healthier automakers regroup for a new emerging world order that sees the European and American markets depressed while emerging markets in Asia grow rapidly.

Earlier in the week GM CEO Fritz Henderson left the company.

GM said in a statement that “this will assist China’s leading listed automotive company in consolidating Shanghai GM revenue into SAIC Motor, which will provide investors a clear understanding of its business.”

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