GM Pursues New Regions, Technologies
General Motors Chairman John F. Smith said Wednesday that the auto maker is undertaking its biggest international expansion in history while stepping up research into a wide variety of advanced-technology vehicles.
Smith told reporters at the North American International Auto Show here that GM is pursuing new ventures in the growth regions of Central Europe, Latin America and the Asia-Pacific.
“We have embarked on the largest international production capacity expansion in our history, with new assembly and manufacturing plants in many countries around the world,” he said.
Smith also predicted that environmental pressures will force changes in the auto industry and lead to a fundamental shift away from gasoline-powered vehicles to electric, hybrid and fuel-cell-powered vehicles.
“No car company will be able to thrive in the future with 100% dependency on internal combustion engines,” he said.
GM’s moves abroad come as it continues to lose domestic market share. It finished 1996 with a 31% share, continuing a two-decade-long slide from when it controlled 50% of the market.
Last year’s sales dip is being blamed on two labor strikes and slow model launches. GM executives say the slide will be reversed this year on the strength of 15 new models.
“In 1997, we plan on aggressively increasing our U.S. market share,” Smith said.
Regardless, GM’s biggest growth opportunities are abroad. Ten years ago, 20% of GM’s sales came in foreign lands. Today international sales account for 35% of the total, and GM projects it will reach 50% in four years. GM is the world’s top auto maker, with a 17% global share.
Smith did not disclose how much GM plans to invest. But in the last two years, it has launched assembly plants in Poland, Hungary, Russia, Argentina, Indonesia, India, Thailand and China.
To become more competitive, GM is reorganizing its global operations to cut costs and eliminate duplication in design, engineering and manufacturing.
Vehicles that in the past would be designed in separate regions are now being developed on common platforms for worldwide sale. For instance, GM’s minivans for both the U.S. and European markets were designed and built here.
With the auto industry’s explosive growth in developing countries, Smith said, pressure is likely to grow on auto makers to develop alternatives to today’s emission-belching internal combustion engines.
GM is focusing research on lightweight body structures and advanced propulsion systems, including so-called direct-injection diesels and electric-drives.
Mercedes-Benz, Chrysler and Toyota have all shown fuel-cell concept cars within the last year. GM declined to reveal details of its fuel-cell vehicle program, saying it is at least several years away from being ready.
GM is also developing several hybrid vehicles that executives said could be in operation within a few years. A hybrid typically combines electric 3and internal-combustion drives in a single vehicle.
In one GM hybrid, the conventional torque converter is replaced with an electric motor that serves as the flywheel, starter and alternator and also supplies power for quick acceleration. This is likely to be used first in larger commercial vehicles.
GM is also developing a hybrid that uses an electric motor to power the rear wheels and a conventional engine to run the front wheels. The result is an all-wheel-drive vehicle with much better fuel economy than today’s four-wheel-drives.
A third GM hybrid replaces the conventional engine with an advanced electric drive unit powered by advanced batteries. The batteries are charged on-board by a small gas turbine auxiliary propulsion unit. The system is estimated to improve fuel economy by 50% or more.
“Our goal is to perfect this hybrid technology by early in the next century, just a few short years away,” said G. Richard Wagoner, president of GM’s North American operations.
