General Motors President Mark Reuss has recently announced the creation of a new China-based premium import business focused on importing “iconic vehicles” from the U.S. The start-up within the automaker will focus on bringing vehicles and potentially brands that are currently not available in the Chinese market to the country and is expected to have high margin sales. Some vehicles that are not currently sold directly by GM in China include the C8 Corvette, Chevrolet Silverado, Tahoe and Suburban, their equivalent GMC models, Cadillac Escalade, and Cadillac V-Series models.
Mark Reuss told CNBC during a recent interview that “We’re going to bring in some pretty iconic vehicles into China. It’s a strategy that I think is really neat because it’s uniquely American, in most cases.” The products are said to include electric vehicles as well as internal combustion ones. Specific vehicles that will be part of the new business have yet to be revealed. However, Reuss has stated that “a pretty aspirational Cadillac” and other “iconic” SUV-like vehicles will be part of the import business. This could also point to GM exporting its upcoming high-end vehicles, such as the Cadillac Celestiq luxury EV (which is expected to be a hand-built product), and the electric Escalade IQ and IQL.
This new business marks a change in GM‘s strategy as the automaker hasn’t exported many vehicles to China, despite the country being their largest market by volume. Instead, they’ve localized production for China through joint venture partners in the country. In 2021, GM’s Chinese operations earned around $1.1 billion.
Automakers don’t usually export U.S.-built vehicles to China due to costs and tariffs, which take a good chunk out of profit margins. However, the new import business will enjoy a high level of autonomy and will be an independently owned premium brand through the import of “halo cars.” Halo vehicles are often iconic products unique in design and feature high-performance parts.
It’s likely the new business will be importing in low volumes, which would allow vehicles to carry hefty profit margins for the automaker. So long as people continue to desire American-made cars, this start-up business could very well be an easy play.