GM to spend $5B on new vehicle line for emerging markets
The new family of small Chevrolet models will be developed and produced with help from Chinese automaker SAIC.
As automakers face potential trouble in China, General Motors and its Chinese partner are planning to develop a new vehicle line targeted at other emerging markets that show potential for fast growth.
GM and state-owned Shanghai Automotive Industry Corp (SAIC) will spend $5 billion to develop the all-new family of small vehicles. They will carry Chevrolet badges and roll off assembly lines in Brazil, China, India and Mexico.
"With a significant majority of anticipated automotive industry growth in 2015 to 2030 outside of mature markets, Chevrolet is taking steps to capitalize on that growth," said GM president Dan Ammann. "We have taken many decisive actions over the past few years to restructure our business in specific markets as part of our plan to become a more customer-focused company and to generate superior returns on our owners' capital."
GM and SAIC already work together in China, where the joint-venture sold more than 1.7 million vehicles in the first half of the year. Instability in China's stock markets caused overall sales in the world's largest auto market to decline in June, representing the first backward slide in more than two years, however GM and SAIC posted their best-ever sales for the month.
The latest announcement provides more context for GM's rebuff of Fiat Chrysler Automobiles CEO Sergio Marchionne's pleas for further industry consolidation. He had named GM as FCA's top-choice merger partner, however GM politely declined and expressed a preference for further consolidation within its own global operations.
GM suggests the new jointly-developed Chevrolet family will allow the company to tailor vehicles for customer tastes in each market, while allowing the automaker partners to benefit from a global-scale architecture.
"This new vehicle family will feature advanced customer-facing technologies focused on connectivity, safety and fuel efficiency delivered at a compelling value," said GM development head Mark Reuss. "It will be a combination of content and value not offered previously by any automaker in these markets that are poised for growth."