General Motors Co has spent five years re-writing its playbook for making money ...
DETROIT - General Motors Co has spent five years re-writing its playbook for making money in Latin America and the interior of China. Now, it’s show time for the first results of a project code-named GEM, for Global Emerging Market.
This is just the opening salvo in a nearly $5-billion bet by GM to sell up to 2 million technology-laden, modern-looking vehicles annually to consumers who today cannot afford GM vehicles designed for the United States, but may someday as their incomes rise. The Chevrolet Tracker and the Buick Encore - not be confused with its American cousin of the same name - are the first tests of a new strategy for engineering vehicles to appeal to buyers in around 40 nations of the world’s middle class such as Brazil and Mexico, and the huge developing market that exists within China’s heartland.
What GM is counting on them not to notice is that the number of options is limited, to reduce complexity in purchasing and manufacturing, or that touches such as fully-carpeted trunks are absent. “We may not be the absolute lowest price point in China,” GM president Mark Reuss told Reuters at the automaker’s downtown Detroit headquarters. “But we’re going to be right in that segment where this is a pretty good-sized car... a huge value for what you pay for it.
Sometimes, that meant spending more. Houlihan gave the green light to spend extra on machines that could weld on the tops of car doors rather than stamping the door in one piece. The extra investment delivered a door that fit smoothly into the roof of the car for a sleeker look.To offset that cost, Houlihan and his colleagues dug into logistics and the supply chain.
GM has tried to localize costs for these vehicles as much as possible which can help offset currency fluctuations that hit markets like Brazil. That can also mitigate the impact of tariffs. U.S. President Donald Trump has escalated trade tensions with China and has threatened a broad tariff on U.S. autos and parts.GM’s new emerging market lineup will face plenty of competition. Chinese automakers are pushing into some of the same countries GM has targeted.
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