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GM teams up with SAIC for $100m joint venture
By Li Fangfang (China Daily)
Updated: 2009-12-05 07:16
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Workers assembling vehicles at the SAIC-GM-Wuling Automobile Co production line in Liuzhou, Guangxi. GM and SAIC together operate eight joint ventures in the country. [Agencies] |
General Motors Co on Friday said it has set up a $100 million joint venture in Hong Kong along with Shanghai Automotive Industry Corp Group (SAIC) to focus on the Asian markets.
As part of this, the new venture would bring under its umbrella all the Indian operations of GM including the two vehicle manufacturing facilities, a power train unit and the nationwide distribution network.
GM would also produce and sell small cars and mini-commercial vehicles developed by Shanghai GM and SAIC-GM-Wuling Automobile Co in India under the new joint venture.
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"Both companies felt this was the proper time to deepen cooperation beyond China's borders in order to enhance partnership as part of long-term growth strategies," he said.
"Changes in the worldwide economy have created new opportunities in emerging markets," said Hu Maoyuan, chairman of SAIC.
"By leveraging our individual assets and those of our China joint ventures, SAIC and GM are in a strong position to introduce competitive products outside China that will satisfy the needs of consumers in India and other high-potential global markets," he said.
Analysts said the cooperation in overseas markets would help SAIC in its goal of being amongst the top five global auto brands, as well support GM by strengthening its presence in emerging markets.
GM is also transferring its 1 percent stake in Shanghai GM, to SAIC Motor for $84.5 million as part of an accounting rule change. Following this GM would now hold only 49 percent stake in Shanghai GM.
The two companies currently operate eight joint ventures in China.
