General Motors has announced that it will pour US$5 billion (AU$6.82b) into developing a range of new small cars for emerging markets around the world.
The new models, to be marketed under the Chevrolet brand, will be developed and manufactured together with long-time Chinese partner SAIC Motor Corp.
The program promises to focus on introducing customers in China, Brazil, India, Mexico and other emerging markets to a level of quality and technology not often found at the volume-selling ‘budget’ end of those markets.
Likewise, safety forms a significant part of the partnership’s manifesto, moving those markets away from the risk of repeating the horrifyingly low crash-test results that have been published in recent months.
GM president Dan Ammann says the project comes in response both to ongoing growth in emerging markets and to the increasing demand for advanced technologies and enhanced safety that such growth brings.
“With a significant majority of anticipated automotive industry growth in 2015 to 2030 outside of mature markets, Chevrolet is taking steps to capitalise on that growth,” he said.
“Strengthening Chevrolet’s position through this major investment is consistent with our global strategy to ensure long-term profitable growth in the markets where we operate.”
Ammann said that buyers in emerging markets are calling for higher levels of safety, better fuel economy and enhanced infotainment and connectivity options. Regulators in those nations are likewise pressuring carmakers to bring greater attention to safety improvements.
GM’s investment represents part of a larger industry-wide evolution in how these markets are viewed by carmakers, developing new – if still budget-focused – platforms, rather than shipping in outdated and stripped-down technology and tooling from facilities that produce models for mature western markets.
“In order to provide the feature and content level, we need to come at this from a different way and from a different level of scale,” Ammann said.
He added that, for GM, that will mean taking advantage of economies of scale and strong connections with suppliers to produce vehicles at higher levels of quality while still delivering “the right kind of returns” for the company.
The program will introduce a new modular platform developed specifically for emerging markets – which likely means that, while safer, the new architecture would still not meet the expectations and requirements of western markets.
Above: the Chevrolet Sail, sold in a number of emerging markets, is among those that will be replaced through this new program.
The new platform will replace a number of different and largely unrelated architecture programs that GM and SAIC currently operate in various markets.
Ammann says this consolidation will play a major role in GM’s plan to produce the majority of its global models from just four architecture programs by 2025.
Today, around 75 percent of the company’s global product is spread across 14 core architectures – although even that is just half of the 30 GM architecture programs that were running before a previous consolidation effort that kicked off in 2010 under Mary Barra, former product planner and now the company’s global CEO.
The first models built on GM’s new emerging-market architecture will appear in 2018, and the company expects the program to eventually produce around two million units each year.
Mark Reuss, former Holden chief and Barra’s replacement as GM’s global product planning boss, said that buyers can expect “a combination of content and value not offered previously by any automaker in these markets that are poised for growth”.