China Rises on GM Roadmap in Latest Region Consolidation

General Motors Co. said that China will remain intact as the only separate global region outside its North American home under a new consolidation of its international operations, underscoring the country’s importance to its worldwide strategy.

The leading U.S. automaker said it will combine its current international and South American operations into a single unit, which will become its new international region, according to an announcement on Tuesday. The current head of its South American region, Barry Engle, will become head of the consolidated international region, while the chief of the current international division will retire.

The consolidation will leave GM with just three regions globally, one for its home North American market, one for China and the last for the newly formed international division.

“Combining the leadership of the two regions supports our efforts to gain efficiencies in global markets,” General Motors CEO Mary Barra said, in reference to the latest consolidation of the international and South American regions.

The move reflects the importance to GM’s operations of China, which surpassed the U.S. in 2009 to become the world’s largest auto market. GM is one of the leaders in a market whose growth is being fueled by a new generation of upwardly mobile Chinese eager to embrace the car-driving lifestyle.

Last year, GM sold 3.87 million vehicles in the market, up 7.1% from 2015 and a record for the company in the market. That figure accounted for more than a third of GM’s global sales, which reached 10 million vehicles last year for the first time. Its China sales totaled 2.4 million vehicles in the first eight months of this year, though that number was nearly flat from the previous year-ago period as growth in the market slows and competition from local players intensifies.

China remained GM’s largest market in terms of retail sales for the fifth consecutive year in 2016. GM has 10 joint ventures, two wholly-owned enterprises and more than 58,000 employees in the market, where it sells cars under its Buick, Chevrolet and Cadillac brands.

Contact reporter Yang Ge (geyang@caixin.com)