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GM & SAIC: Collaborating


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4. November 2010

With the start of the road show for its Initial Public Offering (IPO) and the report of 13% increase in retail sales for its four core U.S. brands in the month of October, one announcement from General Motors could be readily overlooked, despite the fact that it is incredibly important for the IPO and has the potential of making the 13% uptick in sales seem somewhat irrelevant overall.

SAIC Motor Corp., Ltd. (SAIC), the Chinese car-making giant, and GM have signed a non-binding memorandum of understanding (MoU) on strategic cooperation. Included are such things as developing two next-gen powertrain families—yes, families, not two engines—as well as the co-development of key components, and “the development of a next-generation electric vehicle architecture for China and the acceleration of electric vehicle technical capability in the companies’ China operations.”

EN-V, which is short for Electric Networked-Vehicle, maintains the core principle of personal mobility – freedom – while helping remove the motor vehicle from the environmental debate and redefining design leadership. EN-V is a two-seat electric vehicle that was designed to alleviate concerns surrounding traffic congestion, parking availability, air quality and affordability for tomorrow’s cities. The Xiao (Laugh) model (pictured) was unveiled today in Shanghai alongside Jiao (Pride) and Maio (Magic). They represent three different characteristics which emphasize that future transportation can be fun.

Also, the two have announced that they will work together on addressing the burgeoning Asian market, with a focus on India.

GM and SAIC are not strangers to one another by any means. Recently, they wrapped up their collaboration at the World Expo in Shanghai, where they showed their vision of 2030 vehicles.

Investors who may buy GM’s offering should note well this agreement. If it works out well, then there is a huge upside for GM. And while this probably doesn’t mean that there would be—necessarily, at least—any Chinese-built Chevys rolling around in the U.S., chances are that if there is a new EV architecture developed, and if that EV architecture turns into vehicles that have Chinese-market-sized sales, then you can bet that that will be the sort of EV architecture deployed in the U.S. and elsewhere that GM has vehicles. And Volt will be an interesting science project.

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