Shanghai General Motors and its main joint-venture partner in China yesterday bought an engine plant in the eastern city of Yantai, from Daewoo Motors, to produce 300,000 engines a year.
The plant, set up in 1996 by Daewoo and Chinese partners, was a casualty of the Asian financial crisis and its devastating effect on the Daewoo group.
GM China said it was buying 50 per cent of the plant owned by Daewoo, while the other half ,belonging to the Shandong International Trust and Investment Corp, is being bought by Shanghai Automotive Industry Corp (SAIC), GM's partner in its biggest joint venture in China.
Under the agreement, Shanghai GM will own 50 per cent of the Yantai plant, with GM China and SAIC each owning 25 per cent.
The plant will be renamed Shanghai GM Dong Yue Automotive Powertrain Co and will provide engines for cars made by GM and SAIC's joint ventures in China. It has an annual capacity of 300,000 engines.
GM officials gave no purchase price.