GM slashes prices, ups investment

Slower growth has spurred the US carmaker to up its game in the vital Chinese market

Tough times for Shanghai GM dealers

Tough times for Shanghai GM dealersĀ Image: Shanghai GM

General Motors, in collaboration with its Chinese joint venture partner SAIC, has cut prices on some of its popular models to compete with rival VW, which also started a round of discounts this year.

Shanghai GM will make cuts of up to 53,900 yuan ($8,700) on 40 models across Cadillac, BuickĀ and Chevrolet brands. The latter two reported a drop in deliveries of 8.5% and 5.6%, respectively, last month.

The US carmaker is also using incentives, such as subsidised insurance, interest-free financing, train subsidies and zero down-payments to persuade consumers to purchase.

Despite slower growth and lower margins, GM CEO Mary Barra has pledged to invest $16bn in the region in order to capture a 10% market share. The investments will largely be used to develop 10 new energy-saving models in order to attract increasingly environmentally conscious consumers.