FAW Group and General Motors will establish a joint venture company for commercial vehicles. The listing ceremony will be held on August 30th. This means that General Motors, which has gradually emerged from the shadow of bankruptcy protection, has restarted expansion of its production capacity in China.
FAW Group spokesperson Gao Qing confirmed this to the Caijing reporter on August 25. However, he refused to disclose more. He Weilei, manager of media relations at General Motors China PR, said that both parties are indeed negotiating joint ventures.
As early as the beginning of 2009, FAW Group and General Motors began to discuss commercial vehicle joint ventures. In February of that year, a company named "FAW-GM Light Commercial Vehicle Co., Ltd." applied for registration at the State Administration for Industry and Commerce. However, GM subsequently went into bankruptcy protection procedures, adding to the uncertainty of the incident.
On July 10, GM stepped out of bankruptcy protection and the new General Motors was born. The joint venture with commercial vehicles of FAW Group also accelerated.
A number of FAW Group insiders recently told Caijing reporters that FAW Group and General Motors have already signed contracts, and all work including government approval has also been completed and is only waiting to be listed.
According to informed sources, the main part of the joint venture company is FAW Light Car Co., Ltd. The headquarters of the joint venture company will be located in Changchun City, Jilin Province. The two production bases are located in Harbin City, Heilongjiang Province and Qujing City, Yunnan Province. These two bases are also the production base of FAW Light Automobile Co., Ltd.
FAW Light Car Co., Ltd. is a wholly-owned subsidiary of FAW Group with a registered capital of RMB 650 million. It was established in December 2007 and has an annual production capacity of 230,000 vehicles. It manufactures light commercial vehicles, pickups, micro cards, and commercial vehicles.
Previously, the "Guangzhou Daily" reported that the newly established FAW-GMV joint venture company plans to produce 100,000 cars by 2010, reach a production and sales target of 250,000 by 2015, and achieve sales revenue of 15 billion yuan.
At present, GM has two vehicle joint ventures in China, namely SAIC General Motors Co., Ltd. and SAIC-GM-Wuling Co., Ltd., which produce passenger cars and mini-vehicles, respectively. In the first half of 2009, the sales volume of the two joint ventures in China totaled more than 800,000 vehicles.
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