GM President Mark Royce announced on January 27, 2020 that he will invest $ 2.2 billion in a new all-electric truck and self-driving car at the Detroit-Hamtramck assembly plant in Michigan. ..
Michael Wayland / CNBC
Detroit-General Motors is creating a new China-based premium import business focused on selling high-margin “symbolic vehicles” from the United States.
According to GM President Mark Royce, the business, which GM calls a start-up within automakers, focuses on vehicles and potential brands that are not currently on sale in the Chinese market.
“I’m going to bring a pretty iconic car to China,” he told CNBC in an interview. “Most of the time, it’s a unique American, so that’s a really great strategy.”
The products include not only electric vehicles, but also vehicles with traditional internal combustion engines, Royce said. He declined to identify which car would be part of the new business, but quoted “pretty ambitious Cadillac” and other “symbolic” SUV-like cars.
“It’s some iconic cars, but it’s also some iconic brands,” Royce said. “It’s exciting. It’s another way to think about it.”
The new business is a change in GM’s strategy. Automakers do not export many vehicles to China, the automaker’s largest market. Instead, it localized production in China through a domestic joint venture partner.
GM did not export vehicles from the United States to China in 2021, according to a company spokeswoman. This is compared to last year’s total GM sales of 2.9 million units in China. According to research firm LMC Automotive, GM had previously imported US-made vehicles such as the Chevrolet Camaro into China, but in small quantities.
Automakers usually do not export many US-made cars to China due to logistics costs and tariffs. According to LMC, the top five US-made cars sent to China were from German luxury car makers BMW and Mercedes-Benz. According to LMC, the total is only about 144,000 units.
GM said in a statement that the new import business “is built from scratch and will enjoy a high level of autonomy.” The automaker refused to disclose any other information about the business, stating that “additional details will be shared at a later date.”
Comments confirm plans to create a new, independently owned premium brand in China through the import of’Hello Cars’, following local Chinese media recently reported by GM’s Chinese chief Julian Blissett. ..
Halo vehicles are often iconic products with unique designs and high performance components. Used to draw attention to car nameplates and brands.
New businesses are likely to be small imports, but such vehicles can bring significant profit margins to automakers. GM’s China business generated approximately $ 1.1 billion in revenue in 2021, an increase of $ 586 million from 2020, when the coronavirus pandemic had a major impact on the business.
“It’s Americana. It’s small, profitable, and the whole concept of halo,” said Jeff Schster, president of LMC’s Global Forecast and Americas. “I think there is still a desire to have Americana.”
“As long as it continues, and as long as the volume goes down again, I think it will be a reasonable and easy play,” he added.