GM seems wholly unimpressed by chance to wholly own an electric car factory in China

Beijing’s plan to encourage foreign carmakers to produce more electric vehicles by easing ownership restrictions on factories appears to have received a lukewarm response from industry giant General Motors.

The American car manufacturer said it was happy with the current arrangement whereby it operates through joint ventures with Chinese partners. However, it said it would ramp up production of new-energy vehicles in China to comply with the government’s cap-and-trade policy aimed at reducing pollution.

Asked by reporters whether the company would like to run a fully-owned factory in the mainland, Matt Tsien, president of GM China, avoided answering directly, instead focusing on the benefits of having a local partner.

“We are very pleased with our partnerships,” said Tsien. “Our partners have a huge amount to offer in terms of their understanding of the market and their abilities as well to work with us to make our joint ventures successful.”

China’s deputy finance minister Zhu Guangyao said last week that Beijing was studying the idea of letting foreign car manufacturers own more than a 50 per cent stake in their mainland joint ventures, provided they set up factories to produce new-energy vehicles in the country’s free-trade zones.

The new rules, expected to be published by June next year, stem from Beijing’s determination to protect the environment by encouraging the development and production of pure electric and plug-in hybrid cars.

It is believed that a clutch of global car companies including electric car specialist Tesla are interested in building vehicles through their wholly-owned businesses in China as they vie to tap the world’s biggest auto market.

But Tsien’s remarks imply that GM, which posted its highest monthly sales growth of 2017 in October, has no immediate plan to set up a wholly-owned manufacturing facility on the mainland.

It currently builds and sells cars here through its joint ventures, which include SAIC GM and SAIC-GM-Wuling, with its major Chinese partners SAIC Motor and Liuzhou Wuling Automobile.

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The Ministry of Industry and Information Technology issued a new regulation earlier this year that requires nearly all vehicle makers to sell a minimum number of new-energy vehicles.

Under the new system, those that fail to achieve a high enough “credit score” will have to buy credits from others or face fines.

“We will ramp up volumes of new-energy vehicles to meet the credit requirements,” Tsien said.

GM plans to launch at least 10 new-energy vehicles in China between 2016 and 2020, including the Cadillac CT6 plug-in, the Buick Velite 5 and Baojun E100.

The firm’s Chinese retail sales jumped 11 per cent from a year ago to 382,723 units in October, the highest monthly increase this year.

Its global rival Ford signed an agreement with Anhui Zotye Automobile last week to set up a 5 billion yuan (US$753 million) joint venture focusing on electric cars.