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GM China and FAW Establish Light Commercial Vehicle Joint Venture

General Motors China and China FAW Group Corp. have formed a light commercial vehicle joint venture: FAW-GM Light Duty Commercial Vehicle Co. Ltd.

The new 50-50 joint venture between GM China and FAW is based in Changchun, Jilin. It is focused on the production and sale of light-duty trucks and vans. It also will engage in R&D, exports and aftersales support.

The new joint venture includes Ha’erbin Light Vehicle Co., Ltd., which is located in Ha’erbin, Heilongjiang, and FAW’s share in Hongta Yunnan Automobile Manufacturing Co., Ltd., which is situated in Qujing, Yunnan. Existing and future products will be branded FAW in China, while the joint venture leaves room for the creation of GM derivatives. The joint venture has registered capital of RMB 1.2 billion (US$176 million) and total investment of RMB 2 billion (US$293 million).

Light-duty commercial vehicles will play a strategic role in China’s urbanization and rural development. FAW and GM have a common understanding of the importance of the global commercial vehicle market, including the China market. Cooperation is not only the key for the two partners to achieve our strategic goals. It is also a proactive step for helping the Chinese government realize its plan of restructuring and further developing the automotive industry, broadening the market share of local self-owned brands and enhancing FAW’s performance. The new joint venture will benefit by leveraging both partners’ resources in product development, research and marketing to help satisfy increasing domestic and global demand for light commercial vehicles. It will provide China’s consumers vehicles that are reliable and offer good value for money.

—Xu Jianyi, President of FAW

GM China and FAW initiated official discussions on cooperation in the development and production of light commercial vehicles in January 2007. They signed a memorandum of understanding (MOU) and began conducting due diligence in November 2007. In December 2008, the two parties signed a joint venture contract. In July 2009, the joint venture received approval from China’s central government and related registration processes were completed.


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