Chevrolet, one of the world’s largest car brands, announced that it will expand its business in growth markets by investing USD 5 billion in developing an all new vehicle family that will replace several existing vehicles. The move will expand General Motors’ current partnership with SAIC Motor, a Chinese state-owned automaker. General Motors and SAIC Motor have both entered into an agreement to jointly develop the core architecture and engine of the new models.
This is another important step in General Motors’ previously stated architecture consolidation plan back in 2014. The current program with SAIC and Chevrolet is expected to grow to more than 2 million vehicles annually with the first entry planned for the 2019 model year.
According to a press release from Chevrolet, the investment will substantially improve the profitability and competitiveness of the brand by delivering what customers expect in each market while taking maximum advantage of the benefits of global scale. Meanwhile, the agreement with SAIC Motor will result in significant development cost savings and optimized total vehicle cost.
There will a high level of localization of parts suppliers and this should drive significant savings over the life of the program. Vehicles will be manufactured and sold in several markets including Brazil, China, India and Mexico, and exported for sale to other important growth markets. There are no plans to export the vehicles to mature markets such as the United States.
The new vehicle family is Chevrolet’s answer to the “significant majority of anticipated industry growth in 2015 to 2030 outside of mature markets,” according to General Motors President Dan Ammann. Target consumers can expect “advanced customer-facing technologies focused on connectivity, safety and fuel efficiency,” said Mark Reuss, GM executive vice-president of global product development purchasing and supply chain. “It will be a combination of content and value not previously offered by any automaker in these markets that are poised for growth.”
The developers of the vehicle family are comprised of a multinational team of engineers and designers, assigned to tailor each entry to meet the expectations of customers in each market. “We have taken many decisive actions over the past few years to restructure our business in specific markets as part of our plan to become a more customer-focused company and to generate superior returns on our owners’ capital,” said Ammann. ”This growth initiative is the next important step toward our goal of building the world’s most valued automotive company.”
Chevrolet said more information on the investment plans of General Motors with SAIC Motor and the all-new vehicles will be made available in the coming weeks.