Shanghai Real Estate News

GM opens China research centre to focus on "new energy"

By Norihiko Shirouzu | Reuters 2012-11-29

SHANGHAI (Reuters) - General Motors Co unveiled its latest global research centre in China on Thursday, where it hopes to take advantage of the country's vast supply of engineering graduates to drive its development of a new generation of electric vehicles.

China's auto market has grown rapidly - it has been the world's largest since 2009 - and one of the new centre's primary roles is to ensure the requirements and preferences of consumers in China are integrated into GM (NYSE: - ) 's global product development.

But the new facilities in Shanghai - the GM China Advanced Technical Center - will look after not just China's auto market. It plans to develop an array of technologies and know-how for the global marketplace, alongside similar engineering centres in the United States, Germany and South Korea.

"This centre plays a critical role in GM's global R&D, engineering and design network," said Jon Lauckner, the U.S. car maker's global technology chief.

The decision to site a major upstream research facility in Shanghai was based in part on the relative abundance of engineering talent in China, which already produces more science and engineering graduates than any country, said John Du, a director of the new centre.

"There's tremendous people capability in China with more science and engineering graduates than the U.S., Japan (EUREX: - ) , and Germany combined," said Du.

"China now (Other OTC: - ) ranks first in the world in the number of PhD candidates, and these are talents we want to attract into the GM R&D and engineering workforce. Not just to develop product for China market."

The move is also consistent with a degree of division of labour GM has been promoting among its primary research facilities, said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight.

One principal area of research the new tech centre is likely to focus on, Zhang believes, is "new energy" - a Chinese codeword for heavily electrified technology that powers all-electric battery cars and plug-in hybrid electric vehicles.

"It makes sense because Northeast Asia - Japan, South Korea and China - is the world's major hub for advanced electric car battery research," Zhang said.

Thursday's launch marked the official opening of the second and final phase of the Shanghai centre, which the company said will have styling, vehicle engineering, engine engineering, and vehicle communications research all under one roof.

GM said up to 250 engineers, researchers and designers will eventually work at the sprawling campus.

This is the most comprehensive automotive tech centre in the country," said Bob Socia, head of GM's operations in China, India and Southeast Asia (Other OTC: - ) .

The first phase opened in September 2011, and it has already started research in lightweight auto parts with a focus on magnesium and high strength steel, because China is a major producer of those materials and has ample supplies of both.

The centre has also been testing new, "next-generation" battery technology for electric battery vehicles.

China is home to a large number of automotive parts producers, both indigenous and units of foreign suppliers, who are poised to play a bigger role in supplying more sophisticated components to auto makers around the world, including GM, Du said.

"It makes sense for us to do vehicle development closer to our suppliers," he said.

Du, who heads the centre's Science Lab, which conducts advanced battery and lightweight materials research, said that in his field a presence in Asia was a must.

"(Some of) the companies leading the world in battery development are based in Korea and Japan, so it makes sense for us to do this work in China with its close proximity to both of those countries and their leading edge suppliers in this field," he said.

"Many of the best battery researchers and engineers are also located in Asia, and we're recruiting them to work for GM."