GM invests $5B on car for emerging markets

Instead, GM plans to equip new Chevrolets with features such as data connectivity, and engineer them to comply with emissions controls and safety technology requirements that are moving toward the same standards as markets mature, Ammann said.

The core architecture and engine of the new vehicles are being jointly developed with state-owned SAIC, a leading Chinese automaker and a partner of GM on major joint ventures in the world’s second-largest economy.

Further information on the investment plan and the new vehicle line for each market will be announced in the future.

Chevy says a multinational team of engineers and designers is tasked with creating the new vehicle family to meet the expectations of customers in each individual market where the vehicle will be sold.

As automakers face potential trouble in China, General Motors and its Chinese partner are planning to develop a new vehicle line targeted at other emerging markets that show potential for fast growth. GM’s new emerging-market vehicles will compete with low-cost models offered by the Renault-Nissan Alliance, Volkswagen AG and others. GM estimated in October that it gets about 75 percent of global sales volume from 14 so-called core architectures.

GM is halting production in Indonesia and more recently stopped making the Chevrolet Sonic in Thailand. Critically, the new vehicles will not see export to markets like the U.S. or Europe. GM said the program represents another important step in the company’s previously stated architecture consolidation plan.

In the past, Western automakers typically served these markets with very low-cost, bare-bones cars, or produced stripped-down versions of vehicles that had reached the end of their product lives in mature markets. A high level of parts localization is expected to fuel those savings. The first entry is expected in the 2019 model year, and the programme is anticipated to grow to more than 2-million vehicles annually.

Ammann also said GM believes it can take advantage of economies of scale to be able to produce content-rich cars that it can sell at affordable emerging-market prices will still generating “the right kind of returns” for the company. “This growth initiative is the next important step toward our goal of building the world’s most valued automotive company”. He was also ready to embark on a trip to Brazil, where the company is expected to make announcements this week related to the Brazil and India investments that will tie into the newly announced project.