GM to invest 3 billion U.S. dollars in the next three years to expand its business in China
General Motors (GM) has announced a significant investment of $3 billion over the next three years to further strengthen its presence in the Chinese market. This strategic move aims to support the growth of GM's operations, with funds being sourced from profits generated by its businesses in China. The investment will be allocated across several key initiatives, including the introduction of new vehicle models and advanced powertrain systems, the enhancement of technology development centers, the expansion of existing manufacturing facilities, and the creation of a joint venture focused on automotive financial services.
In terms of new models, GM plans to launch approximately 20 new or improved vehicles within the next three years. Most of these models will be produced in China, including the locally manufactured Cadillac models from Shanghai GM and some imported from North America. Alongside new models, GM will also introduce new engines and transmissions. The production of these engines will take place at the Shanghai GM Dongyue Auto plant, starting in the second half of 2005. Specific details about the new car models and powertrain systems will be revealed closer to their launch.
To boost innovation, GM is upgrading its Pan-Asian Automotive Technology Center in Shanghai by adding state-of-the-art facilities such as a Virtual Reality Design Studio, an NVH Laboratory, and a K&C Laboratory. These enhancements are expected to be completed by the end of the year.
With the introduction of new models and expanded production capabilities, GM’s output in China is projected to reach 1.3 million units by 2007—double the current capacity. To achieve this, GM plans to build a new factory and expand existing ones. For example, the Shanghai GM vehicle assembly plant, currently operating at 200,000 units per year with three shifts, will be upgraded to produce 450,000 Buick vehicles annually. Construction on this expansion began in 2005.
Additionally, the Shanghai GM Wuling Automobile Co., Ltd., which produces small cars for GM and currently has an annual production of 200,000 units, will increase its output to 336,000 units starting in 2006. The company will also begin expanding its production capacity in that year.
In addition to expanding its engine plant, GM is planning to construct a new engine and transmission facility. The new engine plant will be located within the Shanghai GM Wuling factory area, with an annual production capacity of 300,000 units. The transmission plant is still under review.
On the financial side, the joint venture "GMAC-SAIC Auto Finance" has received approval to establish itself and has submitted its business license application to the China Banking Regulatory Commission. This marks the first foreign-funded enterprise in China offering automotive financial services, focusing primarily on vehicle financing solutions for Shanghai GM products.
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