GM plans $5 billion model shake-out

GENERAL Motors has embarked on a $US5 billion ($A6.8b) project to consolidate a hodgepodge of existing unrelated Chevrolet models on to an all-new vehicle architecture for emerging markets such as China, India, Brazil and Mexico.

The new low-cost vehicle family and an engine to match will be developed by a multinational team of designers and engineers in a joint venture between GM and its Chinese partner, SAIC Motor (Shanghai Automotive Industry Corporation), based at their Pan Asia Technical Automotive Centre in Shanghai.

It is unclear if any of the work will filter down to the Holden-based GM Australia Design studio in Melbourne where the design team is already working to capacity on a range of GM projects.

Announcing the project in Detroit overnight, GM president Dan Ammann said the first car on the new architecture was expected to appear in the 2019 model year – meaning a 2018 launch – with up to two million units a year ultimately rolling from regional production lines.

However, Mr Ammann ruled out sales of cars built on the new architecture in mature markets, saying it would be developed exclusively to take advantage of growth in developing countries.

Left: GM president Dan Ammann.

“With a significant majority of anticipated automotive industry growth in 2015 to 2030 outside of mature markets, Chevrolet is taking steps to capitalise on that growth,” he said.

“Strengthening Chevrolet’s position through this major investment is consistent with our global strategy to ensure long-term profitable growth in the markets where we operate.”

Like most global motor companies operating in developing markets, GM’s strategy until now has been to build affordable cars by designing them on amortised, hand-me-down platforms, frequently stripped of high-end features and certain safety technologies.

This time, GM is promising not to skimp on content and performance, while at the same time delivering vehicles that are both affordable and profitable thanks to the benefits of global scale and local sourcing of parts.

GM global product development executive vice president Mark Reuss talked up the content of the new vehicle family, saying: “This new vehicle family will feature advanced customer-facing technologies focused on connectivity, safety and fuel efficiency delivered at a compelling value.

“It will be a combination of content and value not offered previously by any automaker in these markets that are poised for growth.”

GM stopped short of saying which models would gravitate to the new platform, but most pundits expect them to include small and light cars such as the Chevrolet Sail and, perhaps, the Chevrolet Aveo that currently shares its design with the Korean-built Holden Barina/Chevrolet Sonic.

Mr Ammann confirmed that the development of the new core architecture would be part of GM’s platform rationalisation plan. The company reportedly uses a whopping 26 different platforms developed variously in the US, Europe, South Korea, and Australia, but aims to fit most of its range on just four by 2025.

The American automotive press reports that further announcements on investments related to the new architecture will be made this week in both Brazil and India.