Chevy has just announced a $5 billion investment plan to develop a new vehicle family intended to bolster its presence in global growth markets. Chevy is focused on tailoring the new line to be flexible in meeting “rapidly changing” consumer demands, and will include advanced technologies in the areas of connectivity, safety and fuel efficiency. The cars will come in a variety of different body styles and be equipped with both diesel and gas engines. The first entry is expected to make its debut in 2019.

Looking ahead to the next 15 years, the automaker anticipates a good deal of industry growth “outside of mature markets,” and as such, will seek to secure long-term profitability with this new investment. The new vehicle family will replace several existing vehicles already sold overseas, although Chevy declined to specify which models would get the axe. 

Part of the plan includes an expanded partnership between General Motors and the Chinese state-owned auto-manufacturing company SAIC Motor, with the two firms signing an agreement to jointly develop the core architecture and engines for the new vehicle family. 

Chevy says a multinational team of engineers and designers is tasked with creating the new vehicle family to meet the expectations of customers in each individual market where the vehicle will be sold. These include Brazil, India, Mexico and China, with exports also expected to other high-growth, emerging markets. 

Chevy hopes to see sales for the new line grow to more than two million units annually. Critically, the new vehicles will not see export to markets like the U.S. or Europe.

Further information on the investment plan and the new vehicle line for each market will be announced in the future.

Continue reading for the full story.

Why it matters

It’s a big, global village we’re all living in, and with it comes a desperate need for consolidation. As systems get bigger, they must also become more cohesive, yet remain flexible enough to bend to demands that can, at times, be at odds with one another.

As systems get bigger, they must also become more cohesive, yet remain flexible enough to bend to demands that can, at times, be at odds with one another.

This is obvious when watching the auto industry attempt to expand into emerging markets. Automakers can no longer off-load outdated models as a lower-cost alternative to more modern vehicles. Instead, there is strong demand for more cutting-edge technology, which can be tough to bring in high-volume. However, platform consolidation can go a long way toward meeting that goal.

At the moment, roughly 75 percent of GM’s products come from 14 core architectures, and all those different platforms represent a good deal of overlapping (saved) development costs.

This new program will hopefully save GM a ton of money, and consequently lower final vehicle prices for consumers. It’s all part of GM’s overall architecture consolidation plan to build nearly every one of its cars from just four vehicle sets by 2025. Other, more near-term cost-cutting measures include local parts sourcing and local manufacturing at pre-existing facilities overhauled to accommodate the new, low-cost architecture.

Ford Motor Company is taking a similar approach with its One Ford mandate, focusing on a single line of vehicles that is flexible enough to meet the demands of individual markets.

This new program will hopefully save GM a ton of money, and consequently lower the final vehicle price for consumers.

GM predicts that emerging markets will account for 55 percent of sales growth over the next 15 years, with China contributing 33 percent to that total. Conversely, mature markets like the U.S. will contribute just 12 percent of new sales.

Obviously, China is the main target here, so expect the new cars to cater mostly to Chinese market demands. Meanwhile, GM has pulled away from other markets like Thailand, Indonesia and Russia, seeing high risk and difficulties in making a return on investment.

GM currently sells 10 million vehicles annually worldwide, making this new line an expected 20 percent growth overall. All things considered, that’s pretty massive.

What’s this mean for U.S. consumers? While Chevy says the new line won’t see a debut stateside, it doesn’t mean the platforms won’t necessarily be used over here. Could the new vehicle family give us a glimpse into future Chevy products offered to the U.S market?

It’s certainly not out of the question.

Press Release

Chevrolet announced today it is investing $5 billion to strengthen its business in global growth markets through the development of an all-new vehicle family that will meet the rapidly changing demands of customers in these markets.

“With a significant majority of anticipated automotive industry growth in 2015 to 2030 outside of mature markets, Chevrolet is taking steps to capitalize on that growth,” said General Motors President Dan Ammann. “Strengthening Chevrolet’s position through this major investment is consistent with our global strategy to ensure long-term profitable growth in the markets where we operate.”

By creating one all-new vehicle family to replace several existing vehicles, Chevrolet expects to substantially improve competitiveness and profitability by delivering what customers expect in each market while taking maximum advantage of the benefits of global scale.

“This new vehicle family will feature advanced customer-facing technologies focused on connectivity, safety and fuel efficiency delivered at a compelling value,” said Mark Reuss, GM executive vice president, Global Product Development, Purchasing and Supply Chain. “It will be a combination of content and value not offered previously by any automaker in these markets that are poised for growth.”

GM has further expanded its successful partnership with SAIC Motor through an agreement to jointly develop the vehicle family core architecture and engine, which it expects will result in significant development cost savings and optimized total vehicle cost. The program represents another important step in GM’s previously stated architecture consolidation plan.

The vehicle family is being developed by a multinational team of engineers and designers assigned to ensure each entry is tailored to meet the expectations of customers in each market. Vehicles will be manufactured and sold in several markets including Brazil, China, India and Mexico, and exported for sale to other important growth markets. There are no plans to export the vehicles to mature markets such as the United States. A high level of localization of parts suppliers should drive significant savings over the life of the program. The program is expected to grow to more than 2 million vehicles annually with the first entry planned for the 2019 model year.

“We have taken many decisive actions over the past few years to restructure our business in specific markets as part of our plan to become a more customer-focused company and to generate superior returns on our owners’ capital,” said Ammann. ”This growth initiative is the next important step toward our goal of building the world’s most valued automotive company.”

More information on the investment plans and all-new vehicle family will be announced in the future in each market.

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