According to Reuters , General Motors on Tuesday said it had called off talks with shareholders in an engine venture set up by South Korea’s Daewoo Motor Co in eastern China, which Daewoo had said GM had been interested in buying.
The news agency noted that Daewoo said in March that GM was set to buy the $US228 million joint venture in Yantai in Shandong province which is capable of producing 240,000 engines and transmissions a year.
“We have been approached by shareholders of the engine plant,” GM’s China spokeswoman Daphne Zheng told Reuters . “I can confirm the discussions have been ended.”
Daewoo officials had told Reuters discussions hinged around a price for the Chinese engine venture but executives at GM declined to confirm the nature of the talks.
According to the news agency, the engine unit was set up in 1999 with the Shandong government and Daewoo Motor holding half each. Last year, GM agreed to invest 900 million yuan ($109 million) in another car plant in Yantai, its fourth in the world’s fastest growing car market.
Production of the [Opel Corsa-based] Buick Sail family car had already been shifted to the Yantai plant, renamed Shanghai GM Dongyue Motors Co Ltd, which has an annual capacity of 100,000 units, Reuters added.