Suzuki To Help GM Tap Asian Market

By Bridge News General Motors Corp. announced it would increase its equity stake in Japan's Suzuki Motors from 10% to 20%. The world's largest automaker also plans to use Suzuki as the production base for a new family of small cars to be sold in the Asian region. Suzuki Motors said it aims to allocate new shares to GM in order to double the current 10% stake. GM's investment will amount to some US$600 million. Suzuki also said it will invest about 5 billion yen (US$47 million) on the development of a small utility vehicle the YGM-1, which GM and Suzuki plan to sell under the brand name of "Chevrolet." They aim to produce 20,000 cars a year. Suzuki will take a leading part in GM's Asian production by strengthening GM/Suzuki's partnership. However, "Suzuki will maintain its management independence," says Osamu Suzuki, president of Suzuki Motor. GM and Suzuki have been partners since 1981, and GM views Suzuki as a crucial piece of its Asian growth strategy. The company expects the Asian market to propel it to the position of the second largest automotive market in the world by 2010, with sales of up to 20 million units on an annual basis. The existing GM/Suzuki partnership includes Suzuki providing power trains and components for GM's small cars produced in South America, as well as the joint development of a small car designed for the European market. The two companies currently have a joint-venture manufacturing company, called CAMI Automotive Inc., in operation in Canada, which is expected to become the hub for GM's small-car production for the North American market.

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