General Motors has disclosed plans to invest $12 billion China by 2017 and expand capacity 65 percent by 2020. The plan will initially cover the expansion of the carmaker’s SUV, crossover and luxury car offerings -- three segments that GM expects to continue to grow.
GM China President Matt Tsien said that they are investing wisely and accelerating their vehicle development and production capacity to keep pace with the market demand. GM’s move comes as the Chinese auto industry is seen to slow down below 10 percent in coming years, from 15 percent in 2013.
According to IHS Automotive, that growth will slow down 2.5 percent by 2020. GM is expecting the China market to surge 8 percent to 24 million vehicles this year and up to 35 million units annually by 2020. GM President Dan Ammann said that this level of volume would be double the size of expected total United States sales in 2020.
To keep up with the growing Chinese demand, GM will spend $12 billion in China from 2014 to 2017 with a of boost capacity 65 percent by 2020. GM is currently constructing four new sites in China, which should start operations by end of 2015.
The new sites will boost GM’s production capacity to 5 million units from around 3 million units currently. Ammann described the 2020 capacity expansion a soft target. He said that GM is ready to adjust plans for further capacity according to market trends.
GM’s product expansion includes launches of 60 new or refreshed vehicles between 2014 and 2018, Tsien said.