General Motors' joint ventures in China will spend US$3 billion in three years to introduce more Cadillacs and Chevrolets and more than double annual production to 1.3 million units by 2007, GM China said yesterday.
The investments will come from the earnings of GM's five local joint ventures, all of which are 50-50 JVs with Shanghai Automotive Industry Corp, China's biggest carmaker.
Nearly 20 models will be introduced into China, most of which will be locally made, according to Phil Murtaugh, chairman and chief executive of General Motors China.
GM's China ambition is getting closer with its major local rival Volkswagen, which last month announced a 5.3 billion euro (US$5.4 billion) investment in five years to reach 1.6 million units a year by 2008.
"China has been the second most important market for GM after the United States," said Murtaugh. "We will support the sustainable automotive industry and maintain leadership by market."
The company's confidence may partly come from the series models it intends to sell here to cover the intermediate segment with Chevrolet and Buick and the luxury market with Cadillac.
Shanghai General Motors, the sole overseas production base for Cadillac, officially launched the Cadillac brand in Beijing yesterday.
It includes CTS, the first locally assembled Cadillac to be sold in September.
"We will be entrusting Shanghai GM not just to assemble Cadillacs but we also are cooperating in marketing and distribution in China," Murtaugh said.
"I think this is an indication how far the company has come in manufacturing capacity and managing business."
The company had a 117 percent year-on-year sales rise to 94,367 Buicks in the first four months of this year. Its market share in China rose to 11.5 percent by April from last year's 9.8 percent.
Murtaugh also said the production of the newly restructured Shanghai General Motors Dongyue Engine will start in the second half of next year.
The newly purchased Jinbei GM is also expected to resume producing vehicles in the second half of this year, but Murtaugh refused to say which models will be assembled there.
GM, the world's biggest automaker, is also among the first batch of foreign car companies to apply to open an auto financing branch in China.
GM is forming the financing company with Shanghai Automotive and hopes to get approval from the regulatory department.
It said the business will first offer loans for the vehicles from Shanghai General Motors, which is expected to turn out 450,000 units a year by next year.
China's vehicle output is expected to reach 5.5 million units this year.
Murtaugh expects the country will make 10 million vehicles in 2011.
He said every automaker in China has raised output expectations, but there will still be plenty of room, because in the period "some will gain market share, some will lose."