GM Executive Vice President and GM China President Matt Tsien Remarks “Shaping the Future of Transportation” Press Conference March 21, 2016
Good afternoon. Dan just told us about some of GM’s plans for shaping the future of transportation globally.
I want to add to what Dan said and tell you about GM China’s plans to grow our core performance over the next few years.
I will then share with you some of our greener and smarter solutions for personal mobility in this country.
But first, I want to take a step back and take a quick look at China’s vehicle market.
Our Performance
Despite the “new normal” of single-digit economic growth, China set a record for vehicle sales in 2015.
Demand surpassed 25 million units – more than 11 times the demand in 2000.
GM and our joint ventures also set a record. We delivered 3.6 million vehicles in China, which was up 5.2 percent from 2014. We also achieved record market share in China.
SGMW became the first automaker in China to surpass annual sales of 2 million vehicles.
Buick sales exceeded 1 million units for the first time in a single year and Baojun deliveries grew more than 170 percent.
GM’s SUV deliveries in 2015 surged 144 percent on an annual basis, led by successful new models such as the Buick Envision and Baojun 560.
We also saw strong demand for many of our new passenger car models such as the Buick Verano family and new Buick Excelle GT.
This helped China remain GM’s largest market. In fact, China accounted for more than one-third of our company’s global sales.
Our Outlook
Looking ahead, we expect an additional 5 million units or more of growth in China’s vehicle market by 2020.
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That would represent industry growth of about 3-5 percent per year. While that is far from the double-digit growth we have gotten used to, it is equivalent to adding one market the size of Australia every year.
Industry demand in China is projected to remain especially robust for SUVs, MPVs and luxury vehicles.
We anticipate about 4.2 million units of growth in the three segments through 2020. That would account for about 80 percent of total market growth during the period.
We expect the luxury segment alone to generate compound annual growth of more than 10 percent through 2020.
Our Plan
GM is very well positioned to participate in that growth.
We will continue to focus on the segments where the demand is strong and growing. This has been a key to our success from day one.
We will also continue going to where the demand is. We will reach out to lower-tier cities with products that meet those users’ needs.
At the same time, we will further expand our product portfolio and focus on providing the right products to our customers at the right time through an even better mix that matches the rapid changes in the market.
Between 2016 and 2020, GM and our joint ventures plan to roll out more than 60 new and refreshed vehicles in China – including 13 this year.
About 40 percent of GM’s new and refreshed offerings through 2020 here in China will be SUVs and MPVs, and they will include a range of seven-seaters.
We will also be adding 10 new and refreshed models from the Cadillac brand. We got off to an excellent start in January with the introduction of the Cadillac CT6 prestige sedan. It is the first product being built at SGM’s new Cadillac plant in Shanghai.
Value-Added Services
In addition to vehicles, there is a great opportunity in value-added services – especially financing and insurance.
Our SAIC-GMAC joint venture was the first dedicated automotive finance company in China, and it remains the largest.
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About 30 percent of car buyers in China purchased their vehicles using automotive financing in 2015. We see potential to reach 40 percent by the end of the decade.
Last year, GM joined SAIC in the launch of INSAIC. This insurance joint venture is an intermediary between our customers and mainstream insurance companies.
INSAIC is making it easier to obtain insurance when purchasing one of our vehicles. It is also channeling our customers to our dealerships for repairs, for additional peace of mind.
Green Technology
GM is working on our own and through our partnerships in China on the next generation of vehicles and technologies to benefit China and the world.
A few years ago, we opened a state-of-the-art battery lab at the GM China Advanced Technical Center in Shanghai. It is carrying out material and fabrication research, and cell and pack testing.
GM China can assess cost structure and battery cell characteristics, qualify Chinese cell suppliers for GM globally, and more quickly develop new technologies. This is crucial as we prepare to roll out several new NEVs here in China – which I will say more about shortly.
Last year, GM began applying third-generation advanced high-strength steel in the new Chevrolet LOVA RV from SGM, which reached the market in November.
The new steel provides a superior balance between strength and ductility. It offers a 20 percent reduction in weight of selected body components compared with the first generation of high-strength steel.
This translates into a substantial improvement in fuel economy. We look forward to adopting it in more of our vehicles built in China and worldwide.
Green Products
The Chinese government aims to make a major leap in technological innovation by 2025. Support has been strong at the national and local level for the automotive industry’s move toward electrification.
GM is well-placed from an electrification standpoint.
Our operations here in China have access to the full portfolio of GM’s solutions. They range from light electrification to strong hybrids to plug-in hybrids to pure electric vehicles.
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Over the next five years, GM and our joint ventures will roll out more than 10 NEVs in China under the Chevrolet, Buick, Cadillac and Baojun brands.
Some products will begin launching as early as this year.
Connectivity and Innovative Mobility Solutions
Dan talked about GM’s advances in connectivity and innovative mobility solutions.
According to the government’s China Manufacturing 2025 Technical Road Map, 80 percent of cars produced in China are targeted to be equipped with telematics and 30 percent of cars are targeted to have adopted V2X technology by 2025.
The race to V2X has already begun. We see great potential here in China.
We will continue exploring opportunities on our own and by supporting the work of organizations like SAE-China and C-ITS, which are developing a V2X application standard.
With the launch of the new ATS-L last October, Cadillac became the first vehicle brand in China to offer integrated OnStar 4G LTE technology – marking another step forward by GM in implementing our connected vehicle strategy.
By 2020, all Cadillac, Buick and Chevrolet products will be connected in one way or another.
One promising and innovative mobility solution that we are exploring in China is car sharing.
Last May, GM and Shanghai Jiao Tong University began a two-year vehicle sharing pilot program featuring 16 Chevrolet EN-V 2.0 electric concept vehicles. These are the second generation of the EN-V concept that many of you saw at Expo 2010.
The program is generating more than 1,000 rentals per month by university faculty and students. As a key component of SJTU’s Smart Campus Project, it is providing valuable learnings to GM and our partner.
The project received the Best Innovative Practice Award in Shanghai in October.
Earlier this month, Shanghai OnStar and the Midea Group announced a unique strategic partnership for the integration of onboard telematics and smart household technology.
It will broaden the reach of onboard telematics and smart household technology to enhance the consumer experience.
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Conclusion
GM expects the automotive industry to change more over the next 5-10 years than it has over the past 50 years.
However, vehicles featuring traditional gasoline-powered internal combustion engines will not go away anytime soon.
GM will continue partnering with SAIC and our joint ventures to meet the needs of our customers, with a focus on high-growth segments. At the same time, we will go where our customers are – with vehicles that address their individual needs.
Looking ahead to the not very distant future, we have the real potential to make the vision GM showed the world at Expo 2010 in Shanghai a reality. It is a future of the automobile that will be free from petroleum, free from emissions, free from congestion and free from accidents.
GM is intent on helping disrupt the industry to take us there. As GM’s largest market and the world’s largest vehicle market, China should also be a driving force of that change.
We look forward to working with the Chinese government, the academic and business community, and our partners to shape the future of transportation.
Thank you.
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