The partnership between General Motors Co. and China's SAIC Motor Corp. (600104.SH) is set to take its first step onto the global stage with the launch of a joint venture in the competitive Indian market.
The companies, which operate vehicle manufacturing and sales joint ventures in China, are expected to announce the India plan Friday, a person with knowledge of the negotiations told Dow Jones Newswires on Thursday.
"This is a win-win situation," said CSM Worldwide analyst Yale Zhang.
GM has more international experience and has already entered the Indian market, while the competitively priced minibuses made by GM's commercial vehicle joint venture with SAIC and Wuling Automobile Co., SAIC-GM-Wuling Automobile Co., could be a logical fit for India, Zhang said.
SAIC, China's largest auto maker by sales volume, owns 50.1% of the three-way venture. GM owns about a third.
It was not immediately clear what sort of vehicles the GM-SAIC India joint venture will make.
GM already sells passenger vehicles in India, including the Spark, Aveo, Cruze, Optra, Captiva, and Tavera. The new joint venture could look into expanding GM's product portfolio in India, the person with knowledge of the negotiations said, without elaborating.
SAIC Motor spokeswoman Judy Zhu said: "We are in discussions with GM regarding how to expand our cooperation beyond the JVs in the China market."
She declined to elaborate.
In China, GM and SAIC also operate Shanghai General Motors Corp., a 50-50 passenger vehicle-making joint venture.
"We are constantly holding discussions to ensure both (GM and SAIC) are improving and prepared for the future," the U.S. auto maker said in a statement in response to questions about the joint venture in India.
Meanwhile, SAIC said Wednesday it will suspend its shares from trading Thursday due to a "major asset reorganization." SAIC's board will hold a meeting before Dec. 9 to discuss the asset reorganization plan, it said in a statement.
Zhu declined to comment on the share suspension. SAIC said its shares will resume trading on the Shanghai Stock Exchange after it announces a detailed plan for the reorganization.
GM said its sales in China last month more than doubled from a year earlier to 177,339 units. The company's sales in India rose 12% in November from a year earlier to 6,114 units.
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