General Motors’ Chinese joint venture is reported to be taking over a disused car factory in the city of Qingdao to help meet rising demand for small vehicles.
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According to the BBC, GM said SAIC-GM-Wuling Automobile would be able to make up to 70,000 cars and trucks a year at the plant on the eastern coast north of Shanghai, and intends to begin production at the facility by the second half of 2005.
GM also announced on Thursday that it is to spend $US387 million (£213 million) building a new engine plant at its main Chinese base at Liuzhou, in the Guangxi region in the southwest of the country, the report said, adding that the factory, to open in 2007, will be able to make 300,000 engines a year.
The BBC said SAIC-GM-Wuling Automobile, in which GM has a 34% stake, specialises in small-sized cars, trucks and minivans, has a capacity of 300,000 vehicles a year and is said to be struggling to keep up with demand – its sales rose 30.5% in 2004.
GM reportedly said some of the company’s production would move from Liuzhou to Qingdao – its mini-trucks and minivans are badged up as Wuling, while its small car is know as the Chevrolet Swift, better known in some overseas markets at the Matiz.
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By GlobalData“Mini-vehicles account for more than 25% of all vehicles sold in China and remain one of the fastest-growing market segments,” Kevin Wale, president and managing director of the GM China Group, told the BBC, adding: “The expansion was vital for meeting demand.”
The BBC noted that the vacant plant in Qingdao was previously owned by Etsong (Qingdao) Vehicle Manufacturing and, at one time it briefly made cars based on the Austin Maestro, designed in the early 1980s by the precursor to collapsed UK car firm MG Rover.
