General Motors has announced a new vehicle manufacturing joint venture with China’s FAW Group, primarily targeting China’s fast-expanding light commercial vehicle (LCV) market.
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Called FAW-GM Light Duty Commercial Vehicle Co Ltd, the 50-50 partnership is the first major investment for GM since it emerged from bankruptcy in July. It has a registered capital of CNY 1.2 billion (USD 176 million) and a total investment of CNY 2 billion.
The FAW Group is one of the largest automotive groups in China, with substantial joint ventures with Volkswagen group and Toyota Motor as well as extensive wholly-owned operations.
This latest new joint venture, the first between the two companies, will make use of exiting FAW production facilities in Changchun, Jilin province, currently operated by Harbin Light Vehicle Co Ltd and Hongta Yunnan Automotive Manufacturing Co Ltd – according to GM’s executive vice president Nick Reilly.
A new plant is under construction in Harbin designed to double the capacity available to the new joint venture to 200,000 units per year from 2010. A range of light commercial vehicles of up to 5 tons GVW will be produced, including chassis-box models, to be sold initially under the FAW brand. GM is expected to sell a separate range of derivatives for sale in China and for export later on.
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By GlobalDataGM is also a partner in a mini commercial vehicle joint venture with Shanghai Automotive Industry Corporation (SAIC) in Luizhou city, Guangxi province, called Shanghai-GM Wuling Automobile Co Ltd, and has a major passenger vehicle joint venture with SAIC called Shanghai-GM Co Ltd.
Kevin Wale, president of GM China, said GM and its joint ventures sold over 959,000 vehicles in China in the first seven months of 2009, 43% more than a year earlier. This makes China GM’s largest single market for the first time – ahead of the USA.
Tony Pugliese
