General Motors (GM), the largest foreign automaker in China, is considering purchasing an additional 10.9 percent stake in the nation's mini-commercial vehicle sales leader, SAIC-GM-Wuling, said an executive at its Chinese partner Shanghai Automotive Industry Corp (Group), or SAIC.
The SAIC-GM-Wuling venture currently includes GM with a 34 percent share, Shanghai Automotive with a 50.1 percent share and Guangxi government-owned Wuling Motors with a 15.9 percent stake.
The US automaker is said to be in talks with the Guangxi government to boost its holding in SAIC-GM-Wuling to 44.9 percent from the current 34 percent, Chen Hong, president of SAIC, the venture's biggest stockholder said at a shareholders' general meeting yesterday in Shanghai.
Shanghai-listed SAIC would retain its 50.1 percent stake, said Chen, indicating that SAIC won't alter its holdings in the venture.
If the proposed deal goes through, GM would be able to increase its shareholding, leaving the Guangxi government-owned Wuling Motors with a 5 percent stake.
While GM China officials refused to comment on the news yesterday, the vehicle venture has been good for all the parties involved. Just last Friday, SAIC-GM-Wuling announced that it had become the first Chinese automaker to sell 1 million vehicles in a single calendar year. Wuling is the first domestic brand to achieve annual sales of 1 million units.
Boosted by government encouragement of rural residents to upgrade from farm vehicles to more efficient mini-vehicles, SAIC-GM-Wuling has been one of the fastest growing automakers in China, with sales jumping nearly 60 percent on an annual basis in 2009.
In the first 11 months, the venture delivered more than 980,000 vehicles to customers, compared with 647,296 units in 2008.
It is on track to remain China's mini-commercial vehicle sales leader for a fourth consecutive year.
SAIC-GM-Wuling plans to roll out another two new minivan models next year, said Yang Jie, general manager of SAIC-GM-Wuling Sales Co. It may also contribute to GM and SAIC's new joint venture in India, which will leverage products and expertise from SAIC-GM-Wuling.
Automobile sales in India may double to 4 million units by 2015 from 2 million units this year, said Chen of SAIC. Indian vehicle sales may rise 12 percent annually in the next few years, he said.
With the government also offering tax breaks for vehicles with an engine capacity of 1.6 liters or less, and subsidies for vehicle trade-ins, these moves are being seen as good news for the automotive industry next year, Chen said. The executive added that he expected total vehicle sales to increase 10 percent in 2010.
China was crowned the world's biggest auto market this year with over 13 million units sold across the country.
Launched in 2002 in Liuzhou, the Guangxi Zhuang autonomous region, SAIC-GM-Wuling manufactures a range of Wuling brand mini-trucks and minivans as well as the Chevrolet Spark mini-car. It has a second manufacturing base in Qingdao, Shandong province.