GM Invests in China

Already a large player China, the world'd largest auto market, GM made another leap to secure their leading market share. Along with its joint venture partners SAIC Motors, GM spent $252.5 million to build the largest proving ground in the country.

Essentially a large test track for new cars, the proving ground will make introducing and improving vehicles made for the Chinese market that much easier. Without having to ship cars to South Korea, the United States, or any other tracks, GM will save both time and money when it comes to the creation, inspection, and final sale of the car. GM China President Kevin Wale stated, "When we look forward, our volumes are going to increase significantly and to win in the market place you have to introduce more products and introduce them quicker and better than the competition". This investment will allow them to continue building on the leading 14% market share they held last year. This move clearly shows that GM wants to control the Chinese market and prevent any other competitors from breaking the barrier.

 While the Chinese auto market is currently slowing, GM is looking at their long-term prospects in a market projected to move from $12 million to $30 million in sales by the end of the decade. The building of this track is a deep seed in China that will make it much more efficient for GM to operate.

GM’s initiative to develop vehicles faster comes with understanding the Chinese culture. "Speed is everything in China," Wale states. "The market moves quickly and you've got to adapt quickly." GM is clearly showing its ability and motive to act quickly and take a more commanding lead in the Chinese Market. While smaller cars are the bulk of sales for GM, the growth of wealth in China will allow for new SUV and luxury cars to be developed.

-Rishi Chheda


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