GM ‘optimistic’ on continued China growth

Melissa Burden
The Detroit News

General Motors Co. continues to forecast growth in China, expecting to meet or exceed expected industry growth of 3 percent to 5 percent through 2020, the company’s GM China president said Thursday.

Matt Tsien, GM’s China president, said in a roundtable with reporters in Detroit, that the company has no plans to change its investment plans in what is GM’s largest sales market, representing 37 percent of company sales last year. That comes in a market that is maturing and has shown signs of a slowdown in sales.

“Our outlook is pretty optimistic,” he said.

GM’s sales in China have slowed in recent months and have fallen short of industry growth of about 8 percent so far this year. The company and its joint venture’s sales in China through the first quarter rose 0.2 percent to 963,652.

GM expects sales volume to grow as new launches of vehicles such as the Cadillac CT6 and Chevrolet Malibu XL improve. IHS Automotive predicts light vehicle sales in China will grow 5.4 percent industrywide this year to about 25.8 million.

Tsien said April sales will “shape up to be a pretty good month” and the automaker plans to launch 13 new or refreshed vehicles this year, aiding sales. The company plans to launch more than 60 new and refreshed vehicles through 2020, 40 percent of which will be SUVs and multipurpose vehicles.

“We’re pretty well-positioned to support continued growth in the marketplace,” he said.

The carmaker’s first-quarter SUV sales soared 148 percent with popular models such as the Buick Envision and Baojun 560. Strong sales of luxury vehicles also are helping offset weaker demand for small cars.

GM has big goals for growth of its Cadillac brand in China, which Tsien said could become Cadillac’s biggest global market within 10 years. Cadillac sales are up 6.1 percent in China through the first three months this year and GM will launch 10 new or redesigned Cadillacs through 2020.

The company opened a new $1.2 billion Cadillac plant earlier this year to produce the new CT6 flagship sedan and recently launched production of the new XT5 crossover for the Chinese market. The plant has annual capacity of 160,000 vehicles and is part of GM’s strategy to grow the Cadillac and Chevy brands globally.

Last year, GM Chairman and CEO Mary Barra said GM would invest $14 billion into new vehicles, manufacturing facilities and other areas of the business through 2018 in China.

GM also said last year that it would invest $5 billion into Chevrolet to bolster its position in global growth markets including China. The investment includes developing a new family of platforms for Chevy vehicles.

The Detroit automaker also has plans to introduce more than 10 “new energy” vehicles such as plug-in electric hybrids and pure battery electric vehicles in China over the next five years. The company recently showed a new Buick LaCrosse hybrid electric for the Chinese market and later this year will launch the new Cadillac CT6 plug-in electric hybrid. He would not say whether the Chevrolet Bolt EV, a pure electric vehicle with 200 miles or more of range GM is launching late this year, would go on sale in China or whether GM will produce a plug-in electric hybrid version of the Buick Envision SUV.

New energy vehicle sales tripled in 2015 in China from 2014 totals, thanks to financial subsidies, according to LMC Automotive.

“Clearly the determination is there and my expectation is that it will grow and grow fairly rapidly over the next few years,” Tsien said of electric vehicle sales in China.

Tsien said GM is being negatively affected by a 3 to 5 percent industry price reduction on carryover vehicles. But with growing sales of SUVs and luxury vehicles, he said the company’s average sales price in China is growing.

GM and its joint ventures in China sold a record 3.61 million vehicles to retail customers last year, up 5.2 percent from 2014. Its share of the market grew to 14.9 percent.

The company in China has 11 joint ventures, two foreign enterprises and more than 58,000 employees. The company sells Buick, Cadillac, Chevrolet, Baojun and Wuling brands in China.

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