1 September 2009

GM forms light truck venture in China

Embattled General Motors will invest $293 million to set up a light commercial vehicle production venture with major Chinese automaker FAW Group.

The 50-50 joint venture, based in the northeast China city of Changchun in Jilin province, will make light-duty trucks and vans, GM officials said.

“For us in China, this is an important complement to the rest of our portfolio,” said Kevin Wale, president and managing director for GM’s China operations.

The venture will use two existing FAW plants in Changchun and the city of Harbin, also in the northeast, with combined annual capacity of 90,000 vehicles, Wale said.

A greenfield plant, currently under construction in Harbin, will add 100,000 units of capacity by the end of next year, he said.

Vehicles made at the venture will carry the FAW brand and will focus on supplying the China market, but they could export the vehicles under a GM brand through the Detroit automaker’s global network in the future, Wale said.

GM is making Buick, Chevrolet, and Cadillac models at its flagship China venture with SAIC Motor Corp. It also makes minivans, pickup trucks, and the Spark compact car in a three-way tie-up with SAIC and Liuzhou Wuling Automobile.

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