GM stake in China venture dips

10:54, December 05, 2009      

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U.S. automaker General Motors Co. reduced its 50-percent stake in its main Chinese venture with Shanghai Automotive Industry Corp. Group ( SAIC) to 49 percent Friday in an unexpected move, the company said in a statement.

GM also announced that the two automakers had formed a new venture to manage their joint expansion efforts in India and other emerging markets.

GM said it was transferring 1 percent of its stake in Shanghai GM to SAIC Motor, a Shanghai-listed company.

"This will assist China's leading listed automotive company in consolidating Shanghai GM revenue into SAIC Motor, which will provide investors a clear understanding of its business," the U.S. automaker said.

It is reported that the two automakers will use GM's auto assembly and power train facilities in India to build small cars from the Shanghai GM range and mini-commercial vehicles from the SAIC-GM-Wuling line.

"These products will join GM's global vehicles, allowing GM India to quickly add entries in growing market segments," GM said.

GM and SAIC currently operate eight joint ventures in China that have helped to make GM the No. 2 seller of passenger cars in China. This year, China has overtaken the United States to become the world's largest auto market.

GM and SAIC became venture partners in 1997 and began producing vehicles two years later.

Source:Xinhua
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