General Motors

Ties with SAIC still strong, says GM

The two partners plan four more mainland plants while talks over Indonesia under way

PUBLISHED : Monday, 28 October, 2013, 3:53pm
UPDATED : Tuesday, 29 October, 2013, 2:03am

US giant General Motors has dismissed speculation its ties with Shanghai-based SAIC Motor are fraying, saying the partnership is thriving and the two carmakers are discussing further collabouration in Indonesia.

Recent independent moves by SAIC outside China had been seen by some industry insiders and experts as signalling the two companies might be drifting apart, but GM’s top China executive said it was merely a consequence of its state-owned partner’s growing maturity as a carmaker.

“The relationship between SAIC and GM has never been better,” GM China chairman Tim Lee said in an interview.

Within China, Lee and GM China president Bob Socia said sales by GM’s joint ventures with SAIC and others were likely to grow this year by 300,000 to three million vehicles.

Roughly half of the volume would come from no-frills microvans GM produces with SAIC and another partner.

According to the two executives, GM plans to launch more new or significantly redesigned models in China next year, including a key small-car update next year.

It also plans to further grow exports of jointly designed and produced cars from China.

To keep up with demand, GM China and SAIC are rushing to open four new plants – two along the country’s prosperous east coast and another two in the middle western region to add an additional one million cars a year to capacity by 2015.

“It’s a big bet” with SAIC, Lee said.

Lee, who is also GM’s global manufacturing chief, recently agreed to give up his broader responsibility as head of GM’s international operations to focus just on China.

We’re looking at options and alternatives in Indonesia with

“The conclusion that [GM chief executive] Dan Akerson and the board came to was China is so important to us and the relationships within China are so important” that GM needed to have Lee focus on China, he said.

Despite the expansion in China, some industry experts have suggested a cooling of ties between GM and SAIC elsewhere.

In 2010, SAIC became a 50-50 partner in GM’s operations in India, jointly selling Wuling microvans under the Chevrolet badge. At the time, officials at the US firm described the alliance as an ideal way to break into other emerging markets, pointing to Southeast Asia as a possible second target.

Last year, however, SAIC passed on an opportunity to inject more capital into the struggling operation, letting its stake decline to 9 per cent. Moreover, SAIC also announced plans to start making cars in Thailand with local firm CP in a deal that did not involve GM.

GM’s Socia said SAIC’s move in Thailand showed that the Shanghai-based company was feeling more confident as a standalone carmaker to compete with GM and others in some areas.

“I don’t think it’s fair to expect everything we do outside of China, we have to do with SAIC and vice versa,” Socia said.

Lee said GM and SAIC had never discussed co-operating in Thailand but noted the two companies were still in discussions over Indonesia, a key emerging market with a population of more than 240 million people.

SAIC spokeswoman Judy Zhu agreed the relationship between GM and SAIC was healthy. On Indonesia, Zhu said SAIC was “still learning the Southeast Asia market and exploring possible business opportunities”. She declined to elabourate.