Go-West drive secures US giant's nod to take 34pc in truck-maker Liuzhou Wuling Motors

General Motors has concluded a deal with Liuzhou Wuling Motors that will allow the United States car-maker to take a 34 per cent stake in China's seventh-largest vehicle manufacturer.

The contracts, which were signed last week, are part of a wider restructuring at Wuling that will see GM's Shanghai partner, Shanghai Automotive Industry Corp (SAIC), take a major stake in the Guangxi-based truck-maker.

GM is set to acquire its shareholding through a B-share initial public offering by Wuling that is likely to take place during the first quarter of next year pending approval from the China Securities Regulatory Commission.

SAIC will acquire its stake through a simultaneous direct asset transfer.

Wuling, in southwest Guangxi Zhuang Autonomous Region, is the No 3 mini-commercial vehicle producer in the country. It is expected to make about 110,000 trucks and vans this year, priced between US$2,500 and US$5,500.

The participation of the US firm in Wuling's restructuring represents a victory for the central government, which has been actively promoting foreign investment in the mainland's backward western provinces, particularly for the purpose of industrial revitalisation.