GM Objects

General Motors Corp. is unhappy with a provision in the Chinese government's first draft of its next vision for the automotive industry.

Provision One stipulates at least 50% of cars sold in China be derived from Chinese intellectual property. While most major global OEMs now are manufacturing vehicles in China, the research and development work largely is performed in their home countries, as many of the vehicles built in China are derived from global platforms.

China asked GM and other OEMs for input in drafting the new policy, and discussions are ongoing. But so far, the country's own objectives appear to be winning out.

Another provision of the policy, which GM finds more amenable, reinforces the alliance strategy between Chinese auto makers and global OEMs, says Fritz Henderson, GM president-Asia/Pacific.

GM may be unhappy with the intellectual property stipulation, but it's also bracing for its implementation.

“We're not pulling back,” Henderson says. “Our view is that we're going to continue to make investments in our engineering capability, support our business in China with China technical capabilities.”

He says GM has made substantial investment in the Shanghai-based Pan-Asia Technical Automotive Center, a joint venture between GM and partner Shanghai Automotive Industry Corp.

The Chinese government, Henderson says, is driving toward a future in which international OEMs are not simply manufacturers in China, but use the country's resources.