US-based car manufacturer General Motors is optimistic that the automobile industry in China is on its way to recovery and anticipates the market will increase from 24.6 million vehicles in 2016 to about 30 million within the next four years.
GM China head Matt Tsien also pointed out the company’s domestic joint venture for budget cars and a shift towards functional models in small urban centers will give GM an advantage over competitors in these areas.
“There will be diffusion but the growth in China’s automobile market is imminent,” Tsien said.
The car market in China improved after overall sales declined from April to August of 2015 when it posted growth of only 14.6 percent. Lethargy in the growth of the country’s Gross Domestic Product added instability to the short-term outlook of the industry.
General Motors is in a better position compared to overseas competitors due to investments in its brand which started in 2000 when the company established the SAIC-General Motors-Wuling Group with Guangxi Automobile Group and SAIC Motors.
Sales have come to a standstill in so-called mega cities like Shanghai and Beijing. However, results were higher in small cities and rural towns since motorists there preferred plain and cheap vehicles. Foreign corporations overlooked these low-margin cars.
The more affordable vehicles of SAIC-General Motors, Baojun and Wuling, have sold around 2 million units during the last few years.
According to Matt Tsien, consumers are willing to spend because of flexible income. This is very evident as the majority of retail shops and restaurants are busy on most days of the week. Online shopping is also flourishing so GM continues to be buoyant regarding the growth potentials of the car industry in China.
GM already announced its plans during a media briefing in Beijing. This includes the introduction of an additional 60 car models in China until 2020. The company expects a growth of three to five percent in China’s market within the next five years.
Around 40 percent of General Motors’ newer models for china will be high-end mini vans and sports utility vehicles. The car manufacturer will bring in 10 modernized Cadillac units and all its Cadillac, Chevrolet and Buick models in China will have Internet connectivity by 2020. Aside from these, GM will introduce computerized safety features like detection of blind spots and independent driving technology for highways and during heavy traffic.