China’s SAIC Motor and General Motors (GM) have signed an agreement extending their joint venture partnership by 20 years to 2047, the companies said in an official statement. Building on nearly three decades of cooperation, the renewed agreement aims to accelerate SAIC-GM's transition toward intelligent electric vehicles (EVs) and advance its global expansion. GM has seen its sales in China crater over the past decade, as Chinese domestic automakers have grown more sophisticated and the market has moved sharply to EVs. Chinese experts noted that amid the transformation of the auto industry, multinational companies continue to view the Chinese market and industrial chains as a key part of their global strategies, with brand synergies and technological complementarity helping both sides secure market shares and expand business. Meanwhile, they also warned that trade restrictions imposed by the U.S. could become a major obstacle to cooperation among multinational companies.
GM is seeking to expand its global exports by leveraging China as a key hub. It plans to focus on its Cadillac and Buick brands in China, and would discontinue sales of the Chevrolet brand. The terms also will allow GM to use China as an export hub to ship Buicks and Cadillacs to the Middle East, Africa, South America, Mexico and elsewhere in Asia, the Detroit automaker said. GM was one of the first global automakers to enter China when it won a coveted partnership with SAIC in 1997 and grew to become one of the country's top-selling carmakers. China is transitioning from a technology "recipient" to a technology "provider," with two-way empowerment becoming a new feature of industry collaboration. Experts said the auto industry is moving from one-way flows of capital and products to two-way exchanges of technology and capabilities. As cooperation evolves from simple joint production to deeper collaboration in supply chains and R&D ecosystems, closer integration between Chinese and foreign automakers is paving the way for a more open and mutually beneficial global mobility industry.
The SAIC-GM last year launched the China-developed Buick Electra sub-brand of electric and hybrid vehicles. Its Electra E7 SUV recorded more than 10,000 sales in its first month and is set to become the joint venture's first premium model sold overseas, starting in October. However, GM said the company has no plans to export to the U.S., where tariffs and national security policies have kept Chinese automakers out of the market, the Global Times reports.
The South China Morning Post adds that SAIC and GM, the largest carmakers in China and the United States in terms of sales volume, are building on a partnership that began in 1995 and led to the SAIC-GM joint venture in 1997. Wang Xiaoqiu, Chairman of state-owned SAIC, said both sides should leverage their strengths in technology, branding, global distribution and local resources, opening new avenues for development with a global perspective. The venture would launch at least 30 electric vehicle (EV) models in China by 2030, with the goal of “joining the major players” in the world’s largest EV market, GM said in a statement. The renewal comes as sales from SAIC-GM and affiliates slumped from a peak of more than 4 million vehicles in 2017 to about 2.17 million units last year. GM’s global car sales also shrank sharply to about 6.2 million units last year from over 10 million units in 2016. As of June, domestic brands like BYD and Leapmotor commanded nearly 70% of the Chinese market, thanks to their dominance in EV technologies, according to the China Passenger Car Association (CPCA).
The extension was seen as necessary, as GM had a global production network and a loyal customer base, while SAIC had access to China’s powerful supply chain, according to David Zhang, General Secretary of the Shanghai-based International Intelligent Vehicle Engineering Association. “The car market is a cutthroat competition, with everyone vying to knock out the other players and be the last one standing,” said Zhang. “If the agreement were to be terminated rashly, both SAIC and GM would suffer significant losses.” Zhang highlighted GM’s plants and sales channels across the world, which could help ship SAIC-made cars to overseas markets, especially North America, offering a unique edge to the Chinese carmaker amid escalating trade tensions. Despite shrinking sales, GM-related affiliates still accounted for nearly 45% – or about 1 million units – of SAIC’s new car sales in the first seven months of the year.
SAIC remained China’s largest carmaker by sales, delivering 2.38 million vehicles between January and July, narrowly ahead of BYD’s 2.2 million units, which were entirely EVs. SAIC has also benefited from its ownership of MG, a historic British brand merged into the group in 2007, which has led China-made car sales in Europe for 11 years in a row. Sales exceeded 300,000 units last year.
The only way international carmakers could compete with Chinese carmakers was through collaboration with Chinese suppliers, said Tim Hsiao, head of the Greater China auto and shared mobility research team at Morgan Stanley, in an interview in April. “Even if Chinese cars cannot enter the American market, the Chinese market is large enough that Chinese and U.S. carmakers can continue to cooperate amicably,” said Zhang.
