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SAIC and GM Form New Investment JV for Asia-Based Expansion and New Production and Sales JV for Global Small Cars and Mini-Commercial Vehicles in India

Saic-gm
China domestic sales of SAIC-GM JVs and milestones. GM and SAIC JVs have sold more than 6.3 million vehicles inside China. They are growing their presence outside mainland China with the launch of an investment joint venture in Hong Kong and a new joint venture for the production and sale of Chevrolet brand vehicles in India. Source: GM. Click to enlarge.

Shanghai Automotive Industry Corporation Group (SAIC) and General Motors Company are expanding their cooperation in Asia with the formation of a new 50-50 joint venture investment company, General Motors SAIC Investment Limited. Situated in Hong Kong, it will facilitate their expansion efforts. SAIC and GM currently operate eight joint ventures in China.

The partners plan to leverage their resources to support expansion in emerging markets, beginning with India. SAIC and GM have formulated a joint strategy for investment in that country that will utilize GM’s two vehicle manufacturing facilities and a powertrain facility in India and GM’s nationwide distribution network in the formation of a new joint venture.

Under this new JV, small cars from Shanghai GM and mini-commercial vehicles from SAIC-GM-Wuling&mash;SAIC and GM’s manufacturing joint ventures in China—will be produced and sold in India. These products will join GM’s global vehicles, allowing GM India to quickly add entries in growing market segments.

The establishment of the India joint venture is expected to be finalized in the first quarter of 2010.

Changes in the worldwide economy have created new opportunities in emerging markets. 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.

—Hu Maoyuan, Chairman of SAIC

Over the past decade, SAIC and GM have created one of the world’s most successful automotive industry partnerships. Both companies felt this was the proper time to deepen cooperation beyond China’s borders in order to enhance our partnership as part of our individual companies’ long-term growth strategies.”

—Nick Reilly, GM Executive Vice President and President of GM International Operations

(As one of a series of executive leadership changes announced this morning, Reilly is now named president, GM Europe, and will leave his role leading GM International Operations.)

Both companies reached an agreement for GM to transfer 1% of its stake in Shanghai GM to SAIC Motor, thereby giving SAIC majority ownership. This will assist China’s leading listed automotive company in consolidating Shanghai GM revenue into SAIC Motor, which will provide investors a clear understanding of its business. Shanghai GM management will continue to operate with the existing joint management structure and oversee operations of the joint venture.

SAIC and GM began cooperation in 1997, when the two automakers formed Shanghai GM and the Pan Asia Technical Automotive Center (PATAC) engineering and design joint venture. That was followed by the launch of six additional China joint ventures, including SAIC-GM-Wuling; GMAC-SAIC Automotive Finance Company, China’s first approved and operational automotive financing company; and Shanghai OnStar Telematics, which will provide a range of in-vehicle safety, security and communication services for selected Shanghai GM models starting this month.

Since it began regular production in 1999, Shanghai GM’s domestic sales have grown more than 22-fold. Through the end of November 2009, Shanghai GM had sold 2,973,411 vehicles. Since its establishment in 2002, SAIC-GM-Wuling’s domestic sales have more than quadrupled, with cumulative sales through the end of November 2009 totaling 3,384,848 units. It has been China’s leading producer of mini-commercial vehicles for the past three years. PATAC has played a key role in re-engineering global products for both joint ventures in line with local preferences, regulations and driving conditions.

Comments

Henry Gibson

It is now time for GM to use the hydraulic hybrid technologies, long since developed, to make all of its vehicles, large and small, more fuel efficient. ..HG..

HarveyD

This may be the best way to ensure GM's future. The huge current and future Chinese market cannot be ignored.

Future GM electrified vehicles, sub-assemblies, batteries and parts can be produce at much lower cost in China, India, Brazil, Mexico etc.

Some (up to 6) of the existing GM local plants could be converted (with economic recovery $$$$M) into fully automated, standardized plug-in battery modules, (1 Kwh, 2 Kwh, 3 Kwh, 4Kwh and 6 Kwh each) mass production for future PHEVs, BEVs, solar power and other e-storage requirements.

Many of the current UAW memebers will have to be put on early retirement or recycled to work in the future green economy, manufacturing and installing wind mills/generators, solar panels, electrical distribution network etc.

Reel$$

It will not happen Harvey. GM said recently (Lutz - temp Chairman) they'll make motors, power control and batteries ALL core competencies. With the economics in NA growing jobs is much more important than the short term bottom line.

Besides - China's big factory suffers a major issue - "carbon impact of transport."

SJC

Those are the growth markets, so if they can make a cleaner and more fuel efficient vehicles there, they can avoid a lot of the mistakes we have made the last 50 years. Back in 1959, it was about chrome, carburetors and fins. Fuel mileage was not even talked about and pollution controls was an absurd concept, totally unnecessary.

HarveyD

Well said SJC.

The major (very large) future market
for electrified vehicles may very well be in China and India where 2.5+ B people already live.

With eight times the population and if the current trend continues, their potential market will be many times that of USA by 2030/2040.

They may very buy the first one (if not 2 or 3) billion electrified vehicles.

Whoever can or will mass produce the lowest cost, higher performance, batteries will make a fortune. Battery-$$S may replace Petro-$$$. Unless the trend changes, many of those batteries will be manufactured in China and India, just to satify the huge local markets.

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