Ding: Shanghai GM unaffected by GM crisis

Shanghai, November 26 (Gasgoo.com) The operation of U.S. auto giant General Motors has been plunged into deep crisis. Will this trouble spill over into its Chinese venture Shanghai GM? In a meeting yesterday, SAIC vice president and Shanghai GM general manager Ding Lei said firmly that Shanghai GM will not be affected substantially by its U.S parent's current situation.

The three auto giants in the United States have been plagued by the global financial crisis these months and their operations are teetering on the edge of collapse. To strive for survival, the three Detroit-based automakers are seeking help from U.S. Congress and Treasury Department.

In a meeting with Shanghai government officials on their year-end inspection tour of the mega-city's auto industry on November 25, Mr. Ding Lei said that General Motors has one third of its operation in its home market the United States, with the other two-thirds of the business scattered around the world. In the emerging markets like China, GM's operation and venture are going on excellently as usual.

Asia, especially China, remains to be one of the world's most important markets in the world. The Chinese market has great potentials to be tapped and this constitutes a strong guarantee of Shanghai GM's growth. As a global auto company, GM has not changed its plan to increase investment in its China operations in the coming years.

Shanghai GM is a 50:50 joint venture between Shanghai Automotive Industry Corp. (SAIC) and General Motors Corp. "Over the past 10 years, Shanghai GM has built up its strengths and competitiveness in production, marketing, and technological development. Currently, our production, investment, and R&D are all going according to plan," said Mr. Ding. "We also have sound and sufficient funds. The popularity and networks of Shanghai GM have not been affected in the Chinese market."

The financial crisis has obviously reduced the sales of most automakers, and Shanghai GM is no exception. As a result, the joint venture has scaled down the sales target for this year according to the market situation. Mr. Ding noted that Shanghai GM will carry out its temporary austerity policy by seeking alternative sources of revenue and restricting expenditures. The company will explore new growth points in the fields of independent innovation, resources pooling, and new-energy car development.

Chinese newspaper 21st Century Business Herald reported last week that Shanghai GM and another Chinese auto giant Dongfeng Motor have plans to buy out some assets of the crisis-plagued U.S. giants GM and Chrysler. Shanghai GM has not confirmed this sensational news story, but one of its executive admitted that it is quite reasonable and possible for the Shanghai automaker to acquire some GM's OEM projects or joint venture assets in China.

To buy or not to buy its U.S parent's assets in China, that is another question. Still, Shanghai GM as a Chinese auto giant has its mighty capability to weather the financial crisis, among other risks, and will step onto a new stage of healthy growth -- this is the confidence the company's boss Mr. Ding Lei has exuded to Chinese consumers as well as government officials.