GM, SAIC join hands for India

Auto major General motors on Friday announced plans to enter the domestic commercial vehicle segment in collaboration with its global partner Shanghai Automotive Industry Corporation (SAIC) of China. The company also said that it has signed an agreement with the Chinese company, with whom it has a 50:50 joint venture, that all its operations in the emerging Asian markets starting with India would now be owned by the GM SAIC tie up.

With SAIC, GM will develop, manufacture and sell commercial vehicles by 2011 though no concrete investment plans have been announced so far. This marks the first major entry of a Chinese automotive manufacturer in India.

"By combining the resources of GM in India with those of our partners in China, Korea and across the globe, we can respond faster to the evolving domestic market than ever before and also have the products to support our export desires," said Karl Slym, president and managing director, GM India.

SAIC and GM, currently operate eight joint ventures in China, and have also formed a new 50-50 joint venture investment company, General Motors SAIC Investment Limited. Situated in Hong Kong, it will facilitate their expansion efforts.

The tie up will utilise GM's two vehicle manufacturing facilities (Halol and Talegaon) and a powertrain facility in India and GM's nationwide distribution network.

Though initially commercial vehicles would be introduced, small cars from Shanghai GM, will also be produced and sold in India at a later stage. The establishment of the India joint venture is expected to be finalised in the first quarter of 2010.

"Changes in the worldwide economy have created new opportunities in emerging markets," according to Hu Maoyuan, chairman of SAIC.