China's Automaker Invests in GM-Daewoo Joint Venture

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Last updated at: (Beijing Time) Monday, October 14, 2002

China's Automaker Invests in GM-Daewoo Joint Venture

The Shanghai Automotive Industry (Group) Corp. (SAIC) said Sunday it will take over 10 percent of the shares of a new General Motors-Daewoo joint venture at a cost of 59.7 million US dollars.

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China's Automaker Invests in GM-Daewoo JV

The Shanghai Automotive Industry (Group) Corp. (SAIC) said Sunday it will take over 10 percent of the shares of a new General Motors-Daewoo joint venture at a cost of 59.7 million US dollars.

This is the first time a Chinese automaker has ever taken part in regrouping and merging of global automotive enterprises, said SAIC Chairman Hu Maoyuan, at a press conference hosted by the SAIC and GM China.

The GM-Daewoo Auto & Technology Company, based in the Republic of Korea, is expected to go into operation by the end of this month.

With the SAIC taking its share in hand, GM will take 42.1 percent of the joint venture's stakes and GM's global partners 14.9 percent, with the remaining 33 percent held by Daewoo creditors.

The new company will be engaged in designing, manufacturing and marketing of sedans, multiple-purpose and light-duty vehicles, and provide after-sale services.

The GM-Daewoo deal, signed in April, is seen by industry sources as a fresh effort of GM for a bigger share of the Asia market, while the SAIC's acquisition is expected to further enhance its cooperation with GM.

Describing the acquisition as a major step of the SAIC's strategy of "overseas development," Hu said the move will help the company mingle with the international auto market in terms of capital, products, enterprise management and human resources.

"It will also help the SAIC to improve its capacity of independent development and sharpen its competitive edge internationally," he said.

As one of the three leading Chinese automakers, the SAIC has established 57 joint ventures with world famous multinational corporations from 11 countries and regions. These joint ventures contribute to more than 90 percent of the SAIC's sales income and profits.

Philip Murtaugh, GM China chairman and CEO, spoke highly of the SAIC's joining in the GM-Daewoo project. He said it would be a milestone in the development history of China's automotive industry and provide a new pattern of cooperation between Chinese and global auto industry.

The SAIC and GM have cooperated in many fields. Three joint ventures between them, namely the Shanghai GM Company Ltd., Pan-Asia Automotive Technological Center and the SAIC-GM-Wulong Automotive Co., Ltd. are all operating smoothly.

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