Automotive News

Shanghai, December 4 (Gasgoo.com) General Motors and its Chinese partner SAIC Motor Corp jointly announced today that they will form a vehicle manufacturing joint venture in India early next year, Xinhua News reported.

GM would transfer half of its Indian operations to SAIC Motor by setting up a 50-50 joint venture there with the Chinese partner. The deal will require Indian government's regulatory approval. Small cars and mini commercial vehicles currently made at GM and SAIC's China ventures will be produced and sold in India.

The deal with GM makes SAIC the first Chinese automaker to enter India, the world's second fastest-growing auto market, which remains dominated by small, affordable cars. SAIC-GM-Wuling's vans could be well accepted in India more quickly than Shanghai GM's car models, analysts said.

GM has invested over $1 billion in India, where it sells six models under the Chevrolet brand. The company's two auto factories can churn out 225,000 cars a year, far more than it sells domestically.

JD Power forecasts that car sales in India will grow from 1.7 million in 2008 to 3.2 million in 2015, while car sales in China will surge from 8.8 million to 16.0 million over the same period.

GM and SAIC have also reached an agreement to transfer 1% of GM's stake in their 50-50 Shanghai car venture (Shanghai GM) to SAIC.