As China’s automotive sector expands abroad, GAC Motor aspires to be the first Chinese automaker with a foothold in the U.S.
China has been the world’s biggest automaker for nearly a decade, with production rising steadily each year since 2008, apart from a slight dip in 2017. In 2015 it ranked first among countries with the largest production of passenger cars, ahead of Japan, Germany, the U.S. and South Korea. A vast domestic market with high demand has provided an ample base for growth, and Chinese automakers are swiftly become globally competitive. The U.S. market, however, has thus far proved elusive.
At the 2018 Detroit Auto Show earlier this month, Guangzhou-based GAC Motor outlined a plan to build up operations and start selling cars in the U.S. next year. GAC also plans to open a development centre in Michigan and a design centre in Los Angeles this year, the New York Times reports. The company already has a technology lab in Silicon Valley. “We intend to gain a foothold in the U.S.”, said Yu Jun, President of GAC Motor. “If we can make it in the U.S., we can make it anywhere and enhance further possibilities of future growth.”
For its point of entry to America, GAC is considering selling through dealerships tied to Fiat Chrysler. The two already have a partnership in China, where GAC manufactures Jeeps for the Italian-American carmaker. Sergio Marchionne, Fiat Chrysler’s Chief Executive, said his company is ready to work with GAC. “We are talking to them about how and if we can help if they come to the U.S.”, he said.
Fiat Chrysler is under some pressure as technology and new global markets continue to transform the automotive industry. These forces are especially prevalent in the U.S., where Marchionne said his company has “limited potential.” While Fiat Chrysler is profitable, it does not have the financial muscle to invest in technologies such as electric vehicles or self-driving cars. Some see an even closer alliance with GAC in Fiat Chrysler’s future, and in fact, Marchionne has expressed hopes of merging or partnering with another carmaker to improve the company’s long-term prospects.
