GM May Use Wuling of China to Compete in Low-Cost Segment
General Motors has signaled that it may consider purchasing more of an ownership stake in SAIC-GM-Wuling Automobile Company if a decision is made to compete with companies like Tata in the ultra-low cost segment. The Tata Nano was introduced recently with a starting retail price of approximately $2500.
Bob Lutz, Vice Chairman of Product Development for GM, noted that in China, several producers sell cars “at 2,500 bucks all day long.” Regarding the possibility that cheap cars from Wuling might eventually find their way to the U.S. through its partner GM, he added that there are also plenty of $2,500 cars in the United States today. “They’re called used cars.”
Lutz stated that GM has already put aside budget funding to develop a line of cheap cars that would be sold in developing markets like China, India and Africa. If such a line were to be developed, Wuling would certainly be a possibility as the manufacturer, although Lutz stressed that no decision has been made yet in that regard.
Wuling currently produces only trucks and vans for both the Chinese domestic market and some export markets in other countries, which typically sell for around $3000.
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