GAC plans Detroit R&D center

Guangzhou Automobile Group Co Ltd, known as GAC, said it expects to create 62 jobs at a $4.45 million research and development facility it is building in the Detroit suburb of Farmington Hills in the United States.

GAC received a $500,000 grant from the Michigan Strategic Fund in June to help build the center.

Qiang Hong, researcher at market analysis firm the Center for Automotive Research, noted in an email that GAC's center comes after the company opened an R&D facility in California's Silicon Valley in 2017.

"It's significant, as GAC finally acknowledges the importance and unique role a traditional automotive state like Michigan could play for foreign automakers aiming to expand in the North American market," Hong said.

At the North American International Auto Show in Detroit last January, GAC said it would enter the US market sometime next year with the GS8, a midsize SUV that is already on sale in China.

The State-owned company also suggested it was scouting out sites for a planned North American headquarters.

"An R&D center and/or eventually its North American headquarters in a winter state (like Michigan) could also help its global product development. The selection of an HQ will depend on a lot factors, such as broad corporate strategies, key partners, where a manufacturing facility will be and government relations," said Hong.

"It's a very dynamic environment for US-China auto investments, and I believe GAC will navigate with caution and make the right decision," he added.

In China, GAC is making efforts to promote intelligent and internet-connected driving technologies. GAC partnered with Tencent Holdings Ltd last September and unveiled its iSPACE electric concept car equipped with Tencent's AI in Car system.

The company's subsidiary GAC Motor released its new Qiyun smart SUV last month, an upgraded version of the brand's best-selling GS4 SUV, with multiple smart technology enhancements for a stay-connected mobile lifestyle.

"The new GS4 marks the beginning of GAC Motor's new approach to facing the challenges, opportunities and competition in the era of technological revolution and industrial transformation," Yu Jun, president of GAC Motor, said in a news release.

"In the future, we will work with leaders in digital technology including Tencent, iFlytek and AutoNavi, to bring about more breakthroughs in the field of smart driving," he said.

Cao Yingying in Beijing contributed to the story.