General Motors reportedly plans to restart production from a mothballed vehicle factory in north-eastern China in September, freeing up space to focus on the prosperous eastern coast.
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GM, closing in on Volkswagen’s lead in the booming Chinese vehicle arena, plans to shift output of its Buick GL8 executive minivans to that factory from Shanghai, opening up capacity to make more cars at its main plant, Reuters said.
The once-moribund $US230 million north-eastern plant – formerly called Jinbei GM – will have capacity to make 50,000 vehicles annually, GM said in a statement cited by Reuters.
The plant, in the city Shenyang city in the northeastern province of Liaoning, reportedly sold just under 3,300 units in 2003, hampered by a poor distribution network and reliance on a single product – the Chevrolet Blazer sport utility vehicle.
Production of the SUV has been discontinued, GM reportedly said.
The new plant, called Shanghai GM (Shenyang) Norsom Motors Co. Ltd., would be effectively run 50-50 by GM and its longstanding Chinese partner, Shanghai Automotive Industry Corp., the country’s largest car maker, the report said.
“Transferring production of the Buick GL8 to Shanghai GM Norsom will free up capacity at Shanghai GM,” Chris Gubbey, executive vice president of Shanghai GM – the Detroit giant’s main Chinese venture – was quoted by Reuters as saying in the statement.
“This will allow us to capture more market opportunities by introducing more new products in new market segments,” he reportedly said.
Reuters said the restructuring will enable the northeastern plant’s products to be sold through Shanghai GM’s nationwide sales network, and enhance the plant’s skimpy product range.
It is the kind of expansion GM must maintain as it battles to grab market share from domestic leader Volkswagen, analysts reportedly said.
