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GM to invest $5B in vehicle family for global markets

Melissa Burden
The Detroit News

General Motors Co. on Tuesday said it will invest $5 billion over several years on a new family of platforms for Chevrolets that are aimed at helping GM grow in emerging markets. The new cars will replace several passenger vehicles, including the Chevy Aveo.

The vehicles will be built and sold in Brazil, China, India and Mexico. They also will be exported to other growth markets, but not to the U.S. or Europe.

The first vehicle — one of possibly a few dozen — is slated to roll out in the 2019 model year. GM expects to eventually sell more than 2 million of the new vehicles per year.

GM President Dan Ammann would not say Monday what current sales volume is for the vehicles that will be replaced. But he said GM expects “meaningful growth” over today’s sales rate, with expected growth in the markets over time and with GM’s “superior entries” improving competitiveness.

GM has inked a co-development deal with partner SAIC Motor Corp. Ltd. in China to jointly develop the vehicle family core architecture and an engine. The automaker said it expects the tie-up will significantly reduce development costs; development of the architecture is happening across the globe.

Ammann said most of the investment spending, which includes retooling automotive plants, would be made by 2019. GM said it expects Chevy will boost profitability by giving customers what they want in each market as dated vehicles are replaced. GM said its scale also will help its bottom line.

He said a majority of growth in the auto industry over the next 15 to 20 years will happen in emerging or growth markets.

“We think it’s very important for General Motors and Chevrolet, in particular, that we have a formula for winning in these higher growth markets over time, he said. “... It’s all about us making a significant investment in the future growth of the company and of Chevrolet by participating in these markets in a different way than we or anyone else has previously.”

Mark Reuss, GM’s head of global product development, purchasing and supply chain, said in a statement, “This new vehicle family will feature advanced customer-facing technologies focused on connectivity, safety and fuel efficiency delivered at a compelling value,”

Last October, GM announced plans to move from 14 core and 12 regional architectures this year to four vehicle sets (for front-wheel drive, rear-wheel drive, SUVs and trucks) by 2025.

Earlier this year, GM said it is pulling back or eliminating manufacturing in some countries. GM said it would largely pull out of Russia, stopping production and the sale of Opel vehicles and most Chevys. It also restructured in Thailand and announced it would stop building vehicles in Indonesia.