General Motors Company (GM), a brand often thought of being thoroughly American, plans to start exporting full-size sports utility vehicles (SUVs) to China as part of its strategy to drive profits and create an entirely new customer base.
It is a well-known fact that China has one of the world’s largest automobile markets. Last year, more than 25 million vehicles were sold in the country. Major car manufacturers are looking for ways to make inroads into a potentially billion-dollar marketplace.
GM recently featured an automotive lineup at the China International Import Expo in Shanghai. “Our intention is to get customer reaction and find a way to sell these cars in China,” said Julien Blissett, president of GM’s China division.
He added, “We are looking into a variety of market sales plans for these vehicles, including online sales, leasing, and others.” According to Blissett, family demographics are starting to change in China and that could open up potential buyers for their vehicles, i.e. full-sized SUVs.
The automaker is planning to sell four models in China including Chevrolet Tahoe and Suburban, Cadillac Escalade, and GMC Yukon Denali. These models are made in the United States.
GM had been briefly exporting to China in 2017 and 2019. However, the automaker hasn’t had the chance to launch a full business plan to target the Chinese market. This may be the chance GM is eagerly waiting for.
Will American vehicles start to make an impact in Chinese markets? It is unknown at this time, especially with ongoing trade conflicts between the U.S. and China.
GM shares gain more than five percent
Meanwhile, GM shares gained more than 5% to $41.08 each on Tuesday after UBS analyst Patrick Hummel maintained his buy rating and raised his price target for the automaker’s stock from $34 to $50 per share.
In a note to investors, Hummel wrote that the automaker is “fully back on track and likely enjoys strong momentum well into 2021.” He cited GM’s EV strategy as one of the reasons for his bullish position.
The UBS analyst stated,- “With a focus on crystallizing value of its EV strategy, … GM will likely get more credit for being a relative winner in the transition.”
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