GM charts course for electric future in vital Chinese market

Two years after its attempt to sell electric cars in China under its indigenous Baojun brand, General Motors has decided to charge into the world's largest new energy market with its better-known marques.

SAIC GM, its Chinese joint venture, is to launch the Buick Velite 6, the first electric and mass-produced Buick in China.

Later this year, a Chevrolet will join the lineup. Details have not been made public.

"The whole industry will make a big stride in terms of electrification this year and we will do our utmost to do ours," said Matt Tsien, GM executive vice-president and president of GM China, on Thursday in Shanghai.

Tsien billed 2019 as a "crucial" year for GM in China. Among other things, it marks a serious start of GM's transition to electrification and its quest to boost sales in a new era.

In 2018, the US carmaker's deliveries in China slumped 10 percent from 2017 to 3.64 million. Prior to that it had not seen a drop for many years. GM's China sales did not slip even when it filed for bankruptcy a decade ago.

GM said the poor reception of its new three-cylinder engine models was one factor, but the biggest culprit was China's softening overall market.

Last year, China sold 28.08 million cars, down 2.76 percent from 2017, marking the first fall since 1990 in the world's largest auto market, according to the China Association of Automobile Manufacturers. New energy vehicles were the only comfort. Their sales soared 61.7 percent year-on-year to 1.26 million and the figure is expected to reach 1.6 million in 2019.

The segment's growth potential and GM's global conviction in an all-electric future has prompted it to update the portfolio.

The carmaker said it would launch 10 electric vehicles and plug-in hybrids in China between 2016 and 2020. It will introduce another 10 by 2023, hoping to fuel the growth momentum.

GM is developing a platform dedicated to electric vehicles. The first model will be a Cadillac. Although it is not known when the electric Cadillac will arrive, Tsien said all of GM's brands will offer new energy vehicles in China in the future.

In the short-term, however, the carmaker may have to rely on conventional cars.

GM will introduce one Cadillac model into China every six months by 2020, and this year it plans to launch some 20 models in the country, with the absolute majority of them gasoline-powered, to generate new sales.

"Half of them will be brand-new ones and some will help GM go into new sub-segments and thus create opportunities of growth," said Tsien.

GM expects China's downward spiral, which started last year, will stop and rebound in the second half of 2019, bringing total sales to around the same size as 2018.

Tsien said GM's sales, thanks to the new models, will be in line with the overall market trend. He indicated that GM will not see a fall as steep as last year and it stands a chance of positive growth in 2019.

"If you look in the long run, China has huge growth potential," he said, citing statistics that there are around 800 vehicles per 1,000 people in the United States, while there are some 140 in China.

GM said it will continue its three-cylinder engine plan. The new engine is said to cut fuel consumption by 16 percent compared to the last one. And it meets the requirements of China's State VI emissions standards.

SAIC GM said China-made models under its Buick, Chevrolet and Cadillac brands will start to use the new engines this year and 70 percent of all its cars will be equipped with them by 2020.

Such moves are deemed necessary in GM's path toward its global vision of an emission-free future.

After all, electric vehicles will not dominate the world overnight, said Tsien.

In a market as ambitious as China, new energy vehicles are expected to account for only 20 percent by 2025, he said.