China has announced that it will lift a ban on foreign passenger car manufacturing investments, opening the door for new production opportunities in the country.
The Chinese Ministry of Commerce and National Development and Reform Commission made the announcement on Monday, saying that the ban will be lifted as of January 1st, 2022. The ban restricts foreign ownership in the Chinese domestic automobile industry.
General Motors has a robust presence in the Chinese market, selling a variety of passenger cars and commercial vehicles under a variety of brands, including Buick, Cadillac, Chevrolet, Wuling, and Baojun. However, rather than import vehicles for sale in China, General Motors produces vehicles via joint ventures with Chinese partners, thus circumventing hefty tariffs placed on imported vehicles entering the Chinese market.
For example, Shanghai General Motors Company Ltd., better known as SAIC-GM, is a joint venture between General Motors and the Chinese state-owned SAIC Motor, and is responsible for GM China’s Buick, Cadillac, and Chevy models. General Motors also has a joint venture with Wuling, which is responsible for Wuling and Baojun vehicles.
Several other foreign automakers have also partnered with Chinese manufacturers to produce vehicles in the country, including Ford, Volkswagen, BMW.
Now, with the ban on foreign passenger car manufacturing investment set to lift in January, General Motors will no longer need to partner with Chinese groups to produce vehicles in China. However, with a range of partnerships already established, the ban will likely apply primarily to new manufacturers entering the Chinese market, at least for the time being.
In addition to producing cars with Chinese partners, General Motors is also developing vehicles in China for export to other markets. One example is the Chevy N400 Van, which is in fact a Wuling Hongguang V that is rebadged as a Chevy vehicle for sale in international markets, including in South America. Another example is the Chevy Sail, which is sold in Mexico as the Chevy Aveo, and the Chevy Monza, which is sold in Mexico as the new Chevy Cavalier Turbo.
How General Motors will approach this shift in Chinese passenger car manufacturing requirements remains to be seen. That said, you can be sure we’ll be there to cover it all in-depth. As such, make sure to subscribe to GM Authority for more General Motors business news, General Motors production news, and around-the-clock GM news coverage.