General Motors plans to maintain annual investment in China of around $US1bn, helping the company’s joint ventures in China to outpace the industry.
“Our investment tends to be around $1bn a year,” GM China president Kevin Wale told Reuters on the sidelines of a forum, adding that the trend would continue. “That is spread over a whole range of activities including product development,” he told the news agency.
Wale reportedly said the stable investment reflected the large scale of GM’s operations in the mainland where it is the top selling foreign brand in the world’s fastest-growing market.
The company claims about 11.8% of the Chinese domestic market, the world’s second largest automotive market, and hopes to exceed 15% growth this year, Reuters noted.
According to the report, Wale expects stiff price competition to continue: “The biggest problem is competitors,” he said. “Price competition will continue being a challenge, there is no question.”
To help offset that pricing pressure, most auto makers are moving to higher-priced vehicles, which carry wider profit margins, Reuters said. In 2006, GM introduced several new models, including the Cadillac SLS luxury sedan, in China.
GM offers about 30 different models spread over six brands in China and plans on introducing a hyrid vehicle into the mainland next year, the news agency said.
“We will continue to introduce high-technology solutions for China,” Wale told Reuters.