General Motors (GM), the world's No 1 automaker, gained a strong foothold in China's mini-vehicle market Tuesday by setting up a three-way joint venture with two Chinese partners.
After three years of negotiations, GM signed an agreement with Shanghai Automotive Industry Corp (SAIC) and Wuling Motors to establish a mini-vehicle joint venture named SAIC Wuling Automobile Co in Southwest China's Guangxi Zhuang Autonomous Region.
SAIC Wuling is GM's third vehicle manufacturing joint venture after Shanghai GM with SAIC and Jinbei GM with Jinbei Automobile Co in Shenyang in Northeast China's Liaoning Province.
Phil Murtaugh, head of GM's China operations, said GM staked a 34 percent interest in the new joint venture by investing more than US$30 million.
According to the agreement, SAIC and Wuling control 50.1 percent and 15.9 percent of the joint venture respectively.
The agreement came 11 months after SAIC -- one of China's top three carmakers -- acquired a 75.9 percent stake of Wuling Motors, the nation's third largest mini-vehicle manufacturer, which is based in Guangxi.
"Our new joint venture will enable GM China to expand its domestically built product portfolio," Murtaugh said during a press conference Tuesday.
According to Murtaugh, the new joint venture will continue to produce low-cost mini vehicles.
The mini-vehicle market is expected to be the fastest growing segment in China over the next five to 10 years, he said.
Wuling Motors produced 120,000 mini vehicles last year.
(China Daily June 05, 2002)