GM may accelerate plans to increase its output in China

Article by Christian Andrei, on December 16, 2011

In response to the announcement by China’s regulators that anti-dumping duties will be imposed on several vehicles imported from the U.S., General Motors Co. may accelerate plans to increase its output in the country. A note to clients from Himanshu Patel, an analyst for JPMorgan Chase & Co., said that GM's localization plans may be hastened by the upcoming punitive duties of up to 12.9%.

He wrote that GM is planning to boost the local output. He noted that last year in China, only 1.3% of its 2.43 million sales were imported. Three months ago, the World Trade Organization rejected China’s appeal of a ruling that supported U.S. duties on tire imports.

The current rate of auto sales in China is its slowest in 13 years, putting the pressure on local producers to consolidate as foreign carmakers report gains. Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler, said that this move indicates that China has always been able to intervene politically in its markets. Pieper explained the car industry depends a lot on China for growth and that there are now doubts on the “pace of future expansion."

Demand in China may drop as the stocks of automakers fell due to worries about the higher duties. LMC Automotive had said that by 2015, the Chinese market may nearly double to 21 million passenger-car sales. Patel said that GM will experience a “modest impact” due to the tariffs since most of the company’s vehicles imported to China are low-volume models like the Buick Enclave and Cadillac SRX sport-utility vehicles.

In 2011, sales for the Buick Enclave were at a record high that its popularity was even better compared to the three-row crossovers models coming from Lincoln, Audi, and even Acura. In fact just last year, it was estimated that at least 58,000 units were sold with almost 50% of them purchased by customers who were originally owners of vehicles not coming from General Motors.

When Buick eventually released the 2013 Enclave, it was an evolved form of what clearly has been the most successful three-row luxury crossover. In addition to offering driving experience that is more refined, it also came with a new style, fitted with in-vehicle connectivity, and equipped with new safety technologies. The 2013 Enclave comes in both an all-wheel drive version and a front-wheel-drive one.

Powering it is the 3.6-liter direct-injected V6 engine and paired to the automatic six-speed transmission, which helps with the driving experience. Through the QuietTuning engineering method, any unnecessary noise coming from the cabin is absorbed, blocked, and reduced. In fact, it is less noisy compared to the Lexus RX350. Its exterior has a more sculpted design and is complemented with daytime running lamps and taillamps, both utilizing LEDs.

Meanwhile the interior has a more modern design that comes with ambient lighting. Other features include navigation system and the in-vehicle communications called IntelliLink that offers touch-screen control. It makes use of an air bag system at the front center, a first in the industry. There are also the front struts which emphasize the improvements when it comes to performance and safety.

According to Tony DiSalle, who is U.S. Vice-President of Buick Marketing, the new 2013 Enclave brings with it a prized design with outstanding technology and craftsmanship that the brand hopes will introduce it to a new group of customers.

To this end, he added, the designs of the exterior and interior have been evolved with the use of luxurious materials and amenities increased. By being equipped with technologies engineered for the 2013 Enclave, DiSalle continued, it ensures that the model will remain to be resonate with many owners of luxury crossovers. The 2013 Buick Enclave will be officially unveiled during the 2012 New York Auto Show with sales expected to begin by the fall of 2012.

Topics: gm, china, production

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