American auto buyers will never see a vehicle riding on General Motors’ new GEM platform, but in some of the automaker’s biggest global markets, GM hopes that GEM helps it strike gold.
Reuters reported an inside look into the GEM platform on Monday after two incredibly important vehicles debuted for China: the Buick Encore and Chevrolet Tracker. Both ride on the GEM platform, or “Global Emerging Markets.” Although the platform made its debut with the 2018 Buick Excelle sedan in China, the two small crossovers will be the architecture’s true test.
The GEM platform is expected to produce profitable vehicles for the U.S. automaker while keeping costs down. However, it’s budget approach will also mean buyers’ needs aren’t overlooked in the process. GM still plans to outfit cars on the GEM platform with modern amenities. It’s a big bet, huge really—one that GM sunk $5 billion into. The stakes are high as GM works to dip into markets outside of rich cities in emerging markets like Mexico and China. There, buyers have far less money to spend, but the hope is to put them behind the wheel of a cheaper GM car and keep them for life as wages increase.
GM expects these emerging markets to outpace expansion in established world economies like those in North America through 2030.
Thus, GEM is a disciplined platform with strict cost controls, per the report. GM tapped its Chinese joint-venture partner, SAIC, to help develop the platform. Both shared development costs and collaborated on purchasing, too. The strategy is simple: GEM cars will still feature amenities like wireless phone charging, rear-view cameras, and active safety tech, but the options will be limited to reduce manufacturing complexity.
GM President Mark Reuss said the goal was not to create the ultimate budget cars with GEM, but “be right in that segment where this is a pretty good-sized car… (with) a huge value for what you pay for it.”
Some of the money-saving efforts came outside of the cars themselves. For example, GM and its teams dug into logistics such as shipping cars. In Brazil, for example, the cars will be shipped via boats and not land vehicles.
Other areas were all about taking costs out of the car. Integrating the headrests for some GEM-platform cars reduced costs by $7 per vehicle.
The push for GEM-platform cars comes at the same time Chinese automakers themselves begin to target the same countries and areas as GM. However, sometimes it’s the first that captures buyers for life.