GM to put $5bn into emerging market car

General Motors is to spend $5bn on a new family of vehicles to push into global growth markets while deepening its partnership with China’s SAIC Motor, as the world’s third-biggest carmaker continues to recast its strategy in emerging economies.

GM and SAIC, joint venture partners in China, will develop the all-new vehicle architecture and engines for a group of cars that will be manufactured in four industrial hubs — China, Brazil, India and Mexico — with a high degree of locally sourced parts.

The cars, carrying the Chevrolet badge, will then be exported to other countries, but there are no plans to sell the vehicles in the US or Europe.

Dan Ammann, GM president, said the company was trying to come up with a “formula for winning” in the markets that will drive future car sales, as carmakers worldwide grapple with a North American market thought to be near its peak, anaemic growth in Europe and global trouble spots such as Russia.

About 88 per cent of growth in passenger car sales worldwide is expected to come from emerging markets between now and 2030, according to GM.

“This is really all about meeting the rapidly changing needs of customers in these growth markets,” Mr Ammann said. “We felt it was very important to come out and make clear … where we are placing our bets from a growth perspective.”

GM has radically recast its global footprint this year, beating a full or partial retreat from countries such as Russia, Indonesia and Thailand, while investing in capacity in Mexico to produce models such as the next-generation of the Cruze compact, currently manufactured in South Korea.

The new range, which is expected to go on sale in 2019 and hit 2m annual sales, will largely use existing plants and marks the latest attempt by a multinational carmaker to produce a “global car” that appeals to local tastes in emerging markets but shares a degree of commonality that allows it to be produced affordably.

Renault recently launched the Kwid compact in India, which was partly designed and engineered in the South Asian country and is being manufactured in Chennai.

While the GM range will be partly developed at the Patac research centre in Shanghai, Mr Ammann denied that it was an attempt to compete with Dacia, Renault’s affordable Romanian brand that has found considerable success even in developed markets.

He said the point was not to produce a “low-end” model, but to combine content and value in line with demands for a high-level of connectivity, safety and fuel economy.

Mr Ammann declined to elaborate on the body styles to be included in the range, or whether it would include light commercial vehicles. But the line would be “primarily passenger-car oriented”, he said.

GM wants to reduce the number of global platforms it operates from 30 in 2010 to just four “flexible vehicle sets” by 2025. The new emerging market-focused car will be one of those platforms — the broad term used to describe cars with the same dimensions, engine, gearbox, chassis and body components.

“This is in many ways a good example of taking advantage of the global scale that we do have in this company …to do something on an order of magnitude that hasn’t been done before,” said Mr Ammann.