General Motors is reported to be in talks with a Chinese partner to increase its stake in a venture that produces Wuling vans and light trucks.
The automaker wants to buy additional shares in SAIC-GM-Wuling Automobile, Hu Maoyuan, chairman of SAIC Motor Corp, told Bloomberg News. SAIC is the majority shareholder of the venture with 50.1%, GM owns 34% and Liuzhou Wuling Motors the rest.
GM is seeking to boost market share in the world’s fastest-growing major economy, and the venture based in southern Guangxi province accounts for about half its China sales, the news agency said.
“Given the lobbying power of both SAIC and GM, the American carmaker will sooner or later get more shares,” Daiwa Associate Holdings analyst Ricon Xia in Shanghai told Bloomberg News. “This venture is a vital part of GM’s China operation.”
But Henry Wong, GM’s Shanghai-based spokesman, declined to comment, saying all business discussions with its partners were confidential and the company had nothing to announce.
SAIC’s Hu didn’t provide any details or disclose how large a stake GM was seeking.
“GM and our partner in Guangxi are still discussing how to settle the share transfer,” Hu told Bloomberg. “We won’t give up any of our stake.”
GM sold 1.03m vehicles in China last year, about 11% of its global total, the report noted, adding that the company is the biggest overseas automaker in the country in terms of total sales. Combined nine-month vehicle sales at its Chinese ventures rose 9.3% to 785,144, according to Bloomberg calculations.
“The current financial situation may actually help GM push forward the deal,” Daiwa’s Xia said. “Especially given the Chinese government’s willingness to help the US fend off the financial crisis that has also hit GM heavily.”