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General Motors reportedly has concluded its own investigation into the alleged piracy by a Chinese carmaker of vehicles designed by its South Korean unit, Daewoo, and has now taken the case to the Beijing government to seek a resolution.

Describing the case as “very complex”, Phil Murtaugh, GM chairman in China, said, according to the Financial Times (FT) that it had not yet decided what options it should pursue, legal or negotiated, to determine what has become a highly contentious issue.

GM reportedly has investigated the design of two vehicles, a mini-car and a sedan, made by Chery, a state-owned carmaker set up in Wuhu, Anhui province, in the late 1990s.

In an industry rife with the copying of parts, trademarks and designs, the Chery case has become a symbol of the impotence of the Chinese legal system in addressing piracy issues, the FT noted.

“China has a legal system about five to six years old, whereas in the US it is more than 200 years old – it’s a lot more straight- forward to take legal action in the US,” Murtaugh told the newspaper.

The Financial Times said the case has been complicated by the involvement of Shanghai Automotive Industry Corp, GM’s joint venture partner in China, and ongoing confusion about whether SAIC has divested its 20% stake in Chery.

The paper said SAIC has told GM it has unloaded the stake but its officials have refused to confirm this publicly, apparently because of a side agreement with Chery to allow it to continue to use the SAIC name for at least 12 months following the divestment.

Murtaugh, asked why SAIC would not discuss the divestment of its stake in Chery, told the FT: “Chinese politics.”

He reportedly insisted, however, that GM’s relations with SAIC, its partner in its mostly highly successful China business, had not been affected by the Chery dispute.

He denied that GM had refrained from suing Chery because the US group feared it would damage its business in China, where the government still dominates the industry, the Financial Times said.

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By GlobalData