Dismissing recent concerns for Volt-related intellectual property, yesterday GM announced a deal with its Chinese joint venture partner to co-develop electric vehicles for the “world’s largest auto market.”
GM said it and SAIC Motor Corp. will collaborate on vehicle architecture and components, and that plans have not changed to import the American-manufactured Volt which will not be eligible for over $19,000 per vehicle in potential buyer incentives.
From Shanghai, GM Vice Chairman Steve Girsky in a conference call yesterday said the U.S. and Chinese partners will develop pure electric, not range-extended vehicles like the Volt.
GM said it has no plans to hand over key Volt intellectual property, and for now has no plans to build the Volt in China either.
Nor will newly developed vehicles be mere conversions of internal combustion models, Girsky said. Instead, they will be ground-up original designs. He likened yesterday’s deal to GM’s recent LG-Chem agreement, albeit this one is for China, not the rest of the world.
“We have said we will co-develop with partners new technologies that are expensive and high risk,” Girsky said Tuesday. “We will use partners where it is prudent to lower the investment cost, lower the risk, help bring the technology to market faster and, hopefully, scale the technology to bring down costs.”
As we have already noted, the auto industry trend these days is partnerships to meet world environmental challenges, and these in cases have been between companies in previously unrelated industries.
Girsky said to expect more such cases from GM.
“We are going to have a broad range of advance propulsion systems – electrics, hybrids, plug-in hybrids, extended-range vehicles,” Girsky said. “We will use different partners for different products.”
GM and SAIC have been partners for nearly a decade and a half, and plans are to develop new Battery Electric Vehicles (BEVs) at their Pan Asia Technical Automotive Center (PATAC) on a 50-50 basis.
In its press release, GM spun the news positively.
“The co-development of this new electric vehicle architecture demonstrates the broad range of benefits made possible by the strong partnership between SAIC and GM,” said Tim Lee, president of GM International Operations. “For almost 15 years, our two companies have forged some of the industry’s most successful joint ventures. This unprecedented level of cooperation is another demonstration of our companies’ commitment to work collaboratively.”
A quote from Chen Hong, president of SAIC Motor, as would be expected in a press release, agreed on the win-win nature of the dealings.
“Our agreement will enable SAIC and GM to take advantage of economies of scale and get new technology to the market faster than by going it alone,” Hong said. “It will help bring about our goal of leading the automotive industry in new energy vehicles and our vision of sustainable transportation, which we introduced at World Expo 2010 Shanghai.”
Yesterday’s agreement is a follow-up to a non-binding memorandum of understanding (MoU) on strategic cooperation signed by SAIC and GM on Nov. 3, 2010. GM and SAIC pledged at that time to reinforce collaboration in certain core areas of their business, including the development of new energy vehicles and the creation of a stronger and more integrated role for PATAC to work on future vehicles and powertrains.
Aside from this, SAIC and GM are partners in 10 joint ventures in China engaged in vehicle and powertrain manufacturing, sales and aftersales, automotive engineering and design, automotive finance and telematics, and the sale of used vehicles. The companies’ manufacturing joint ventures, Shanghai GM and SAIC-GM-Wuling, are market leaders in China. In addition, SAIC and GM operate a joint venture in India and SAIC is an investor in GM Korea Co.
This last bit regarding India, a growing economy of over one billion people, and considered by some to be the “next China” has been covered by the Truth About Cars. TTAC has said GM has been used as a “Trojan Horse” by the Chinese to enter the Indian market somewhat against the will of the Indian people. But that is another story, perhaps, for another day.
Following a recent New York Times article which we documented that alleged GM was being pressured into forking over intellectual property, Michigan Sen. Carl Levin and Sen. Debbie Stabenow purportedly fired from the hip decrying a “shakedown” of American businesses.
We suspect somewhere in the middle the real truth about GM’s cars lies, but in light of delicate relations and lots of money to be made, GM has denied concerns that it was being pressured for Volt technology.
“Let’s get the Volt story off the table,” Girsky said. “There’s been a lot of noise around the Volt. We’ve had no requests for intellectual property from our partner SAIC or the Chinese government,” he insisted.
Prosperity anticipated for all.
GM has known all along the Volt would be subject to sales-killing Chinese tariffs and would not qualify for breaks equal to nearly half its selling price in that country, Girsky said, and GM is fine with that.
He said the hope is the Volt will later qualify for the incentives but did not explain how he thought that would happen.
Accentuating the positive, Girsky said in all its years dealing with China, there has never been pressure to divulge intellectual property.
“We’ve got 10 joint ventures with SAIC. We’ve been growing share in the market and making a lot of money because we are working with our partner SAIC to satisfy customers. This is not a political decision but a business decision,” he said of yesterday’s BEV deal.
So, although Girsky did not call the Volt a boutique product, he said plans are to sell a limited number of Volts in China as well as other markets and GM will gauge consumer reaction.
“Then we’ll see where we go from there,” he said.
This entry was posted on Wednesday, September 21st, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.