GM Launches New Light Truck Venture with China

The 50-50 joint venture with FAW Group Corp. plans to sell between 80,000 and 90,000 vehicles under the FAW brand in 2009 and 100,000 the next year.

General Motors and Chinese automaker FAW Group Corp. announced a new joint venture on August 31 to produce light-duty trucks and vans for China's fast growing commercial vehicle market.

GM China President and Managing Director Kevin Wale said the truck joint venture rounds out the automaker's product portfolio in China, which accounts for more than half of the world's commercial vehicle sales. "The truck segment is very important. It's growing rapidly like the rest of China," Wale said.

The 50-50 joint venture aims to sell between 80,000 and 90,000 vehicles under the FAW brand in 2009 and 100,000 next year, Wale said.

GM has begun building a new plant in northeast Harbin to double the FAW-GM Light Duty Commercial Vehicle Co Ltd's capacity to 200,000 units a year by 2010, including existing FAW factories in Harbin and southwest Qujing, Yunnan province.

The company will produce "box-on-the-back"-style trucks designed to carry from to one to four tonnes, Wale said, adding demand was increasing as better roads mean truck transport was replacing rail and waterway shipping.

"It's just a result of the economic growth in China and the constant trading that's going on," he said.

The joint venture has a registered capital of 1.2 billion yuan (US$175.7 million) and a total investment of 2 billion yuan, GM said.

Wale said GM's overall sales in China have remained stronger than anticipated this year and that the automaker expected to revise its full-year sales forecast in the coming weeks.

Despite filing for bankruptcy at home, GM and its joint ventures sold a total of 959,035 vehicles in China in the first seven months of the year, up 42.8% from the same period last year, the company has said.

China, GM's second largest market after the U.S., overtook the U.S. to become the world's largest car market for the first time in January.

Copyright Agence France-Presse, 2009

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