General Motors (GM) is retooling its China manufacturing plants to build electric cars in a country that reportedly contributes nearly one-fifth of its profit, the Detroit automaker announced Wednesday (Aug 19).
Under the plan, more than 40 percent of GM’s new vehicle to be manufactured in China over the next five years will be electric cars.
In China, SAIC General Motors Corp., the joint venture with GM, manufactures and sells Chevrolet, Buick, and Cadillac brand automobiles as well as its local brands Wuling and Baojun.
“As GM’s largest market and a global center of innovation, China will play a crucial role in making our vision a reality,” said Mary Barra, GM’s chairman and CEO, in a statement.
GM has vowed to invest more than $20 billion in electric and self-driving vehicles with a goal of no crashes or emissions by 2025. Since the 2010 World Expo in Shanghai when the car maker introduced “Drive to 2030,” the company said it has built what it calls the “largest connected customer base and enhanced its highly localized technical capability and supply chain to support its long-term development.”
GM said it will capitalize on 5G, artificial intelligence and big data. In 2022, 5G will be available on all new Cadillacs and most Chevrolet and Buick vehicles.
“We will enhance local integration and global collaboration by capitalizing on China-leading market trends and playing to the local industry’s strengths,” said Julian Blissett, GM executive vice president and president of GM China, in a statement. “We are ready to activate a new era.”
Reuters reported GM China had a 14 percent share of overall sales of 28 million vehicles in 2017. But by 2019, the share fell to 12 percent of 25 million cars.
Last week, Goldman Sachs began pushing to acquire the GM card, arguing that it’s the best company to usher the car company into an era of commerce where cars will be the next great connected portal. The GM card has about $3 billion in outstanding balances, making it an attractive target.
Paul Scanlan, Huawei's chief technology officer, told PYMNTS that 5G has been deployed rapidly in China, where the 5G network was launched in 50 cities last year. That’s partly because China is more accepting of monitoring and also because the infrastructure groundwork has been laid.