GM eager for 15.9-pct additional stakes in Chinese minivan producer

Shanghai. December 3 (Gasgoo.com) -General Motors is in talks with local government to buy another 15.9 percent stake in its joint-venture SAIC-GM-Wuling (SGMW), Chinese newspaper 21 Century Economic Report said.

 

The report cited General Motors CEO Rick Wagoner as saying that the GM aims to make SGMW a global export hub of mini vehicles in the future. To reach this target, GM is negotiating with the provincial government of Guangxi Automobile Region on a stake purchase deal.

 

Founded in 2002, SAIC-GM-Wuling is based in Liuzhou, Guangxi Zhuang Autonomous Region in southwestern China. SAIC (Shanghai Automotive Industry Corp) holds 50.1 percent stakes of the company while General Motors holds 34 percent and provincial government of Guangxi holds the remaining 15.9 percent stakes.

 

The joint venture automaker produces Wuling brand minivans, Wuling brand mini-trucks and Chevrolet Spark mini-car.

 

In the beginning, SAIC-GM-Wuling suffered from low efficiency and was troubled by huge amounts of debt. But situation started to change for the better when the joint venture got support from provincial government and it soon became the biggest mini vehicle producer in China.

 

In the first ten months of this year, SGMW sold 480,000 vehicles, which represents 43 percent of mini-vehicles sales in Chinese market. In the same period, the company’s total revenue reached 14.4 billion yuan ($2.0 billion). The joint venture has set a target of selling 520,000 vehicles this year. Last year, the joint venture sold a total number of 460,155 vehicles.

 

On July 2 GM inaugurated a 2 billion yuan ($263 million) engine plant at SAIC-GM-Wuling. The plant will have a capacity to produce 300,000 1.1-liter and 1.2-liter units a year, which will first be equipped on a new minivan model called Wuling Hong Tu.