GM to open two new Chinese plants

[TN-W124 Diesel]

http://news.bbc.co.uk/1/hi/business/4603687.stm

General Motors' Chinese joint venture is taking over a disused car factory in the city of Qingdao to help meet rising demand for small-sized vehicles.

GM said SAIC-GM-Wuling Automobile would be able to make up to 70,000 cars and trucks a year at the plant on the eastern coast north of Shanghai.

It intends to begin production at the facility by the second half of 2005.

GM also announced on Thursday that it is to spend $387m (£213m) building a new engine plant in China.

The engine facility is being constructed at GM's main Chinese base at Liuzhou, in the Guangxi region in the southwest of the country.

When it opens in 2007, it will be able to make 300,000 engines a year.

Strong sales

SAIC-GM-Wuling Automobile, in which GM has a 34% stake, specialises in small-sized cars, trucks and minivans.


The expansion was vital for meeting demand."
Kevin Wale, president of the GM China Group

It currently has a carmaking capacity of 300,000 vehicles a year and is said to be struggling to keep up with demand. Its sales rose 30.5% in 2004.

The venture's other shareholders are Shanghai Automotive Industry Corporation Group, China's largest carmaker, and Chinese truck and van firm Wuling Automotive.

GM said some of the company's production would move from Liuzhou to Qingdao.

Its mini-trucks and minivans are badged up as Wuling, while its small car is know as the Chevrolet Swift, better known in some overseas markets at the Matiz.

"Mini-vehicles account for more than 25% of all vehicles sold in China and remain one of the fastest-growing market segments," said Kevin Wale, president and managing director of the GM China Group.

"The expansion was vital for meeting demand."

Rover connection

The vacant plant in Qingdao was previously owned by Etsong (Qingdao) Vehicle Manufacturing.

At one time it briefly made cars based on the Austin Maestro, a vehicle originally made in the 1980s by the precursor to collapsed UK car firm MG Rover.

MG Rover is now in administration, coincidentally after failing to secure a rescue deal with Shanghai Automotive.