GM Daewoo Auto & Technology Co has sued Chery Automobile Co. in a Shanghai court, claiming that the Chinese car maker made unauthorised use of GM Daewoo's trade secrets and breached China's competition laws. GM Daewoo also applied to invalidate Chery's design patents in China, Bloomberg News reported.

``We found that the two models shared remarkable body structures, exterior designs, interior designs and components,'' GM Daewoo spokesman Rob Leggat told the news agency in Seoul. ``A Matiz door can fit on a QQ, and a QQ bonnet fits on the Matiz.''

Bloomberg noted that General Motors, with more than $US2 billion of investments in four manufacturing ventures in China since 1997, is the third foreign car maker to sue the country's companies for violating intellectual property rights.

Chery's spokesman Wan Rui, based in China, told Bloomberg News he hadn't been informed of GM Daewoo's action and declined to comment.

Bloomberg News said Chery released its QQ minicars in China in April 2003, eight months before General Motors' SAIC-GM-Wuling Automobile Co. venture began selling its Chevrolet Spark minicar, rebadged and redesigned from the Daewoo Matiz.

The Chery QQ, powered by an engine of 0.8 liter capacity, went on sale for 49,800 yuan ($6,000) each last year, almost a fifth cheaper than the Spark, the report added.

GM Daewoo, which owns the Matiz model's design copyright after General Motors bought Daewoo Motors in 2002, has been investigating the QQ's ``resemblance'' with the Matiz since April 2003, Bloomberg said.

The investigations "showed that the vast majority of parts in the Matiz and QQ were interchangeable,'' General Motors said in a press release cited by the news agency. "Technology related to the Matiz had never been sold or licensed to Chery through authorised means."

Bloomberg said Chery had added a larger 1.1 litre engine to the QQ, selling it for 45,500 yuan while cutting the price of the 0.8 litre model to 39,800 yuan. General Motors has cut the price of the Chevrolet Spark by 6.3% to 57,900 yuan since last year.

In its suit, GM Daewoo sought an unspecified amount in damages from Chery, and asked the Chinese car maker to cease all sales of the QQ minicar, the report said.

GM Daewoo's action may also extend to Chery's exports of the QQ mini vehicle, Leggat told the news agency. "GM is committed to defend our intellectual property rights, regardless of where it occurs around the world,'' he added.

Bloomberg News noted that Chery in October signed an agreement with Malaysia's largest dealer for Honda cars to assemble up to six Chery models, including the QQ minicars, in the Southeast Asian nation.

"We will check with Chery. If it is true that the QQ is in violation of the law, we will not proceed with producing them. There are other models to choose from,'' Cam Soh, managing director of Chery's Malaysian partner Alado Corp. in Kuala Lumpur, told Bloomberg.

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