American General Motors (GM) and China's state-owned automaker FAW Group Corp. (FAW) announced Sunday a two billion yuan (about 293 million U.S. dollars) joint venture to make light-duty trucks and vans.
"Our new joint venture will address demand in China and other markets for high-quality, affordable products in one of the industry's most robust segments, while complementing the portfolio of products that GM and FAW currently offer," said Nick Reilly, executive vice president of GM.
The new venture, announced as 50-50 cooperation by the two sides, is based in in Changchun, capital of Jilin. It will focus on the production and sale of light-duty trucks and vans and also engage in research and development, exports and after sales support, according to the two companies
It includes Harbin Light Vehicle Co., Ltd., in the neighboring Heilongjiang Province and FAW's share in Hongta Yunnan Automobile Manufacturing Co., Ltd. southwest China's Yunnan Province.
The two companies said they both eye China's booming market. "Light-duty commercial vehicles will play a strategic role in China's urbanization and rural development," said Xu Jianyi, the general manager of FAW Group.
China FAW Group corp., which was founded in 1953 and began production in 1956, has 28 wholly owned subsidiaries and is part owner of 18 companies.
With 132,000 employees and assets of 134 billion yuan (about 19.7 billion U.S. dollars), the company runs business of passenger vehicles, commercial vehicles, and automotive parts and accessories.