Shanghai Automotive Industry Corporation Group (SAIC), which ranks third among the ‘Big Five' Chinese automakers, and General Motors Company (GM), the world's second largest automobile manufacturer, have announced that they have entered into a collaboration to develop and manufacture commercial vehicles and other competitive products for India and also for other export markets.
SAIC and GM, which currently operate eight joint ventures in China, have formed a new 50-50 joint venture investment company, General Motors SAIC Investment Limited, based in Hong Kong, to facilitate their expansion efforts. They have also announced plans to leverage their resources to support expansion in emerging markets, beginning with India.
Based on the automotive industry's long-term potential for growth in India, SAIC and GM have formulated a joint strategy for investment in the country. They will utilize GM's two vehicle manufacturing facilities and a powertrain facility in India and GM's nationwide distribution network in the formation of the new joint venture.
Small cars being produced by Shanghai GM and mini-commercial vehicles produced by SAIC-GM-Wuling, 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 add entries in growing market segments. The establishment of the Indian joint venture is expected to be finalized in the first quarter of 2010. GM believes the additional models and potential volume growth will result in the creation of more jobs in India.
"Changes in the worldwide economy have created new opportunities in emerging markets," SAIC chairman Hu Maoyuan stated. He went on to add, "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."
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 times. 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 grown more than four times, 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.