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SAIC and GM plan to raise JV output
THE Shanghai Automotive Industry Corp and partner General Motors Corp plan to invest US$650 million in their Chinese joint venture to expand production and increase market competitiveness.
The capital injection is part of SAIC's 9.2 billion yuan (US$1.15 billion) investment plan to introduce new models, add capacity in its joint ventures and boost research and development of its self-branded vehicles.
As part of the plan, SAIC and GM intend to spend a combined US$217 million to increase the registered capital of their equally owned Shanghai General Motors Automobile Co Ltd, according to a statement from Shanghai Automotive Co Ltd, the listed unit of SAIC.
General Motors Corp and SAIC will retain their existing shareholdings under the deal.
Communications officials did not provide details on the capacity expansion. But a company source said the investment would be used to upgrade existing assembly lines for future products rather than build new plants.
GM said earlier that the company plans to launch production of a hybrid vehicle that uses gas and electricity next year at Shanghai GM.
Shanghai GM is also expected to roll out a new version of the Buick Regal and other models under the Chevrolet brand.
SAIC also announced a series of investments in auto parts makers as well as a research and development institution to support the development of Shanghai GM and its self-branded models.
SAIC, the Chinese partner of GM and Volkswagen AG, ranked first among Chinese car makers in sales last year.
chinajob This entry was posted on January 17th, 2007 at 08:42:13 am by ChinaJob and is filed under Investing in China.