GM China Seeks Stake In New SAIC-Wuling Joint Venture

GM China Seeks Stake In New SAIC-Wuling Joint Venture

Shanghai - General Motors China announced today that it would continue working toward the formation of an alliance with Shanghai Automotive Industry (Group) Corporation (SAIC) and Liuzhou Wuling Automotive Co. Ltd. (Wuling Automotive).

SAIC and Wuling Automotive signed a restructuring and cooperation agreement earlier today in Nanning, Guangxi Zhuang Autonomous Region. SAIC will take a 75.9 percent stake and become the largest shareholder in Liuzhou Wuling Automobile Co. Ltd., the seventh largest vehicle producer in China. Total net asset of the new joint venture is valued at RMB515.7 million.

The establishment of SAIC-Wuling Automobile Co. Ltd. (SAIC-Wuling) sets the stage for a possible three-way partnership that will represent a significant extension of the strategic cooperation between GM and SAIC, according to Philip Murtaugh, Chairman and Chief Executive Officer of GM China Group.

"Participating in the SAIC-Wuling joint venture will provide GM an opportunity to reach out to the potentially lucrative mini-vehicle market in China, which currently has an annual volume of some 541,000 units," Murtaugh said. "At the same time, it will help increase the competitiveness of the joint venture by providing technology and product upgrades. This will help ensure that SAIC-Wuling becomes the leading manufacturer in its market segment."

"Our proposal to participate in the new venture is consistent with the Chinese government's goal of opening Western China to increased industrial development and consolidating the automotive industry into a smaller group of strong companies," Murtaugh said. "We look forward to its support of our proposal."