GM-SAIC joint venture announced

General Motors India announced today the setting up of the joint venture between General Motors (GM) and Shanghai Automotive Industry Corporation (SAIC). The new company will be based out of Hong Kong and will focus on business in the Asia-Pacific and emerging markets. The first business that come into the company's purview is General Motors India (GMI). GM and SAIC will have equal 50 per cent stake in the Hong Kong company. GMI, in turn, will be 'purchased' by the new JV. At the moment, GMI has stakeholders  that are a number of GM subsidiaries. The final ownership pattern remains unclear although GMI clarified that the change in ownership, as it were, is not going to change anything on the street in terms of day-to-day operations, dealer and service networks and supplier networks.

The advantage of the JV is clear, however. GMI will gain access to three instead of one set of product lines. In addition to the GM-DAT cars they GMI is offering in India, GMI will now also have access to the SAIC line-up of cars, SUVs and LCVs. Further, GMI will also be able to leverage the product lines of the SGM (Shanghai General Motors, the other Chinese GM company).  

What new cars are coming? GMI says it's too early to tell, although a 1-tonne LCV is expected in 2011. In all cases, GMI says that they will pick up products from the lines that they think will find relevance in the Indian market and do their usual exercise of re-engineering and re-spec-ifying the vehicles to suit the Indian market conditions. The LCV, to be specific, will be manufactured at GMI's Halol plant. Karl Slym, president and managing director of GMI said, "We manufacture the Tavera at Halol. This gives us the advantage of having the right size paint shops to accomodate an LCV-sized product." The production of the LCV will lead to some shuffling of car lines with some migrating to the Talegaon plant where GMI has spare capacity.