Liuzhou Wuling Motors, the Guangxi-based compact van manufacturer, has said it would sell 10% of the stock it holds in the SAIC-GM-Wuling Automobile MPV and light commercial vehicles joint venture to its partner General Motors China.
In exchange, GM will supply Wuling with vehicle technology resources, gasgoo.com reported, citing the Beijing News.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
GM reportedly said it had been planning to increase its stake in the company since last year, and that it had already received the government’s approval for the deal. GM will pay Wuling US$51m as well as supply automotive technology until 2013. With completion of the transfer, GM’s share in the company will rise to 44%, while Wuling’s will drop to 5.9%. SAIC Motor, still the company’s largest shareholder, will retain 50.1%. It is believed that this transaction will be important to GM’s continuing expansion, as the company plans to export vehicles to India soon.
According to the report, analysts believe that the motivating factor behind the transaction was SAIC-GM-Wuling’s exemplary performance in China last year with the company’s 2010 sales topping the charts for the fourth consecutive year. 2.35m Shanghai-GM brand vehicles were sold last year while Wuling managed to sell 1.23m.
