Citing the vast opportunity for small but smart vehicles in the emerging markets, General Motors Co (NYSE:GM) has entered into a liaison with the state owned Chinese automaker, Shanghai Automotive Industry Corp.
General Motors Co (NYSE:GM) will be investing $5 billion over the next few years in facilities that would develop Chevrolet compact cars and sport utility vehicles. The sale of the said cars and SUVs is expected to begin from 2019 and the markets being targeted by the two companies are China, India, Brazil, and Mexico. The investment of $5 billion would cover its share of retooling factories and engineering vehicles.
Ahead of his planned visit to Brazil, the company’s President Dan Ammann stated that they had the advantage of working on a global scale and they meant to take this further. The proposal to develop a new family of Chevrolet vehicles with its Chinese partner showcases the strategy of focusing. Earlier this year, Fiat Chrysler Automobiles NV (NYSE:FCAU) had made a proposal to merge General Motors Co to create better economies of scale and produce vehicles jointly.
However, the proposal to merge had been rebuffed by General Motors CEO Mary Barra. Industry experts are of the view that the liaison between General Motors Co (NYSE:GM) and SAIC could be seen as a rationale step to keep the investors quiet after they had raised doubts over the rejection of the FCAU proposal.
Dan Ammann stated that the company expects sale nearly 2 million vehicles a year after the new generation of models such as the Chevrolet Onix and Aveo would be using the common components developed in-house. Presently the compact models made by the company use mechanics and tools developed by the company’s operations in Europe and Korea.
General Motors Co (NYSE:GM)’s Mr. Ammann also stated that the company did not propose to produce low-end vehicles but vehicles that had new features such as better safety technology, data connectivity, and better emission controls. He stated that the vehicles thus produced would be competing with models offered by Volkswagen AG, Renault-Nissan alliance and others.
General Motors Company (General Motors), incorporated on August 11, 2009, designs, builds and sells cars, trucks and automobile parts across the world. The Company also provides automotive financing services through General Motors Financial Company, Inc. (GM Financial). The Company’s four automotive segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO) and GM South America (GMSA). It also sells cars and trucks to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. It sells vehicles to fleet customers directly or through its network of dealers. The Company’s retail and fleet customers can obtain a range of aftersale vehicle services and products through the Company’s dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. The Company offers 13 FlexFuel vehicles in the United States for the 2015 model plus an additional four models to fleet and commercial customers capable of operating on gasoline, E85 ethanol or any combination of the two. GMNA offers vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands to customers in North America and under the Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall brands to customers outside North America. The Company also has equity ownership stakes directly or indirectly in entities through various regional subsidiaries, primarily in Asia. These companies design, manufacture and market vehicles under the Alpheon, Baojun, Buick, Cadillac, Chevrolet, Jiefang and Wuling brands.
The Company also markets FlexFuel vehicles in Australia, Thailand and other global markets where biofuels have emerged in the marketplace. It supports the development of biodiesel blend fuels, which are alternative diesel fuels produced from renewable sources. The Company develops FlexFuel vehicles that can run on gasoline-ethanol blend fuels, as well as vehicles that run on compressed natural gas (CNG) and liquefied petroleum gas (LPG). The Company produces CNG bi-fuel capable vehicles in Europe, such as the Opel Zafira and in the United States the Chevrolet Express and GMC Savana full-size vans are offered to fleet and commercial customers. It offers liquefied petroleum gas (LPG) capable vehicles globally in select markets reflecting the infrastructure, regulatory focus and natural resource availability of the markets in which they are sold. The Company offers seven models in the United States featuring some form of electrification and focuses on developing plug-in hybrid electric vehicle technology (PHEV) and extended range electric vehicles, such as the Chevrolet Volt, Opel Ampera Cadillac ELR.
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