General Motors Co. executives, on a visit to Beijing by new Chairman and Chief Executive Dan Akerson, said the U.S. auto maker is seeking opportunities to boost exports of its cars made in China despite the impact of a rising yuan, and that it plans to sustain its growth within China's market by launching more than 20 new or redesigned cars here over the next two years.
GM's CEO says China represents the highest growth area for years. Above made-in-China Buicks at an auto show in Haikou, China, in September
"China is central to GM's global strategy," Mr. Akerson told a news conference in Beijing on Tuesday. The GM chief said the company has 11 joint ventures in China with two of its primary local partners, SAIC Motor Corp. and FAW Group Corp. "We regard our 11 joint ventures as 11 keys to success, not just in China but globally."
Tim Lee, president of GM's international operations, told the same news conference that GM "will look at every export potential" out of China, such as shipping vehicles to South America or Southeast Asia, even though an appreciating yuan makes the endeavor "marginally more difficult."
A stronger yuan makes it more expensive for overseas customers to buy goods made in China and cuts into the income earned from overseas markets when converted into the local currency.
To compensate for the effect of a rising yuan, Kevin Wale, head of GM's China operations, said the company will focus on slashing costs in China, such as those for design and manufacturing. By driving out cost, GM aims to be "competitive in both" selling within China and exporting out of the country cars it produces here, Mr. Wale said.
Mr. Lee said GM aims to exploit an export opportunity if the company and its joint-venture partners could determine a given China-produced car could become a "[market] segment-leading product" in a sales region outside China.
He noted the GM-SAIC joint venture last year began exporting Chevy Sail compacts designed and made in China to Chile and Peru. GM exports Chinese-made Wuling microvans and uses its dealer networks to sell those vans in markets such as Columbia, Ecuador, Peru, and Egypt, according to the company. In total, GM exported 5,670 GM-branded cars and 7,048 Wuling vans in 2010, a spokeswoman said.
GM last year also established a joint venture to produce and sell no-frills Wuling-designed microvans initially through GM's dealer network in India, and eventually expanding to Southeast Asia and other emerging markets.
As well as gradually beefing up GM's Chinese export capabilities, Mr. Akerson said, it will continue to "invest heavily to ensure our long-term success" in China, the world's biggest auto market.
One area that will receive further investment is product. Mr. Akerson described GM's plan to launch more than 20 new or redesigned cars in China over the next two years, while making more advanced technology available in the Chinese market, as part of an effort to ensure Chinese demand for its cars grows steadily.
GM says it and its local partners sold 2.4 million vehicles in China last year, up 29% from 2009. The company usually doesn't issue a formal sales projection each year, but GM spokesman Johan Willems said on the sidelines of Tuesday's news conference that GM expects its China sales to expand between 10% and 15% in 2011, in line with most industry forecasts for China's overall vehicle market.
"China is clearly a crown jewel in the GM universe," Mr. Akerson said. "China is a unique market sitting in what I think is the highest growth area in the world for the next 10, 20, 30 years."
Mr. Willems, meanwhile, reiterated that GM and its Chinese partners plan to build a plant for low-cost cars in southern China's Guangxi province.
The new plant, in the city of Liuzhou, will have capacity to produce 400,000 cars a year and will start production in 2012. The new plant will produce cars mainly for Baojun, a new, low-cost car brand from SAIC-GM-Wuling Automobile Co., GM's mini-commercial-vehicle joint venture in Liuzhou with SAIC and Wuling Automobile Co.
As of the end of 2010, GM and its partners in China had capacity to produce 2.8 million vehicles a year.