GM set for 'harder life' in China as partner adds models

Bu Gang, a Shanghai logistics company employee, shunned General Motors Co. and Volkswagen AG when buying a new car and instead bought one made by the automakers' Chinese partner.

"The car is pretty cool with good quality and a very attractive price," Bu, 30, said of the mid-sized SAIC Motor Corp. Roewe 750 sedan he chose over a similar-priced Volkswagen Passat or a smaller Buick Excelle last year. "It's really changed my impression of Chinese brands."

SAIC and other Chinese carmakers that work with overseas companies are introducing their own models to boost margins in a country set to become the world's biggest auto market this year. Foreign automakers typically have no remedy because Chinese law forces them to work with a local partner.

"There's nothing they can do," said Scott Laprise, a Beijing-based CLSA analyst. "Your goal as a foreign automaker is just to stay ahead, come up with new technology, spend more money, and be one step ahead of your Chinese partner."

SAIC will add about 30 own-brand models by 2012, threatening Volkswagen and U.S. government-controlled GM. China's biggest domestic automaker more than tripled sales of Roewe sedans this year.

Friends, Enemies

The company introduced the Roewe 750, its first own-brand model, in January 2007. The car, fitted with a 1.8 liter or 2.5 liter engine, costs from 172,800 yuan ($25,300) to 258,800 yuan. It subsequently unveiled the Roewe 550 as well as adding the MG sport-car brand through its takeover of Nanjing Automobile Group Corp.

Detroit-based GM has said it intends to double China sales to 2 million over the next five years.

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