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GM exec: Chinese cars won't be very cheap

Viknesh Vijayenthiran

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GM exec: Chinese cars won't be very cheap

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The prospect of China flooding Western markets with half-price autos is overrated and is unlikely to happen says GM Holden’s new boss Chris Gubbey. The former Shanghai GM vice-president said that increased costs required to improve quality, safety and equipment levels of Chinese built cars would see production costs rise much closer to that of international levels.

According to Gubbey, China’s low wages only account for about ten percent of the total cost of a car, which means Chinese manufacturers are “faced with the same cost pressures as every other car manufacturer to get into a developed market.” Gubbey’s estimate for when Chinese cars will reach a level in quality that’s comparable with Western makes is roughly four to five years, reports GoAuto.

China’s carmakers are now hiring retired Japanese engineers as well as Americans and Europeans, and there’s a lot of pressure from its people to see wage levels rise. However, there’s a lot of talent already in the country as evidenced by the recent Buick Riviera concept car (pictured) that was designed and constructed completely in-house at GM’s new Chinese design studio.