Here’s How GM Will Dominate China

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GM prepares for its grand return to US equity markets.General Motors China (NYSE:GM) hosted a Tech Day on November 29 in conjunction with the opening of the Advanced Technical Center in Shanghai.

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The opening of the GM China ATC comes just two days after the company issued a release detailing its intention to increase its investment in and development of electric-vehicle technology in the country.

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“China has made electrification a key strategy,” said Jon Lauckner, GM chief technology officer, vice president of Global Research & Development, and president of GM Ventures, one of the key figures behind GM’s push to lead auto technology. Now that China is the largest car market in the world, manufacturers are looking for ways to shape their products to appeal specifically to the wants and needs of the region.

“The ATC’s R&D team is focusing on five key innovation areas: battery cells, lightweight materials, manufacturing processes, engines and transmissions, and developing mobile app for connected urban driving,” Lauckner told attendees of the Tech Day event. Ostensibly broad in scope, the five areas do identify key areas where technology drives competitive advantage.

Ford (NYSE:F) and Toyota (NYSE:TM) have both identified fuel and manufacturing efficiency as top priorities, making headlines on each account. Toyota produces the hybrid of choice and boasts legendary manufacturing efficiency. Ford is quickly gunning for Toyota’s throne, directly challenging the Prius family with its C-Max line and proving itself just as innovative with its flexible manufacturing developments.

For its part, GM has posted record sales in China recently, and this technology center will provide the backbone it needs to sustain a commanding presence in the country.

How Will This Affect the Company’s Stock?

Investors clearly seem to think GM is taking the right steps as shares climbed as much as 2.2 percent on the news. Perhaps overshadowed by the new technology center is GM’s announcement that it will be building a third manufacturing base in Chongqing Municipality with its partners SAIC and Wuling Motors.

GM’s expansion into China has been clean and competent so far, and its ongoing commitment to developing a strong manufacturing and research base in the country will no doubt pay off in the long run.

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