GM gets SAIC to agree on equal power in making JV product decisions

Article by Christian A., on April 19, 2012

General Motors and its Chinese partner Shanghai Automotive Industry Corp. have come to an agreement that GM will have equal control of key decisions in their Shanghai General Motors Co. joint venture, according to reports from Reuters and The Wall Street Journal. Currently, GM controls 49% of the joint venture while SAIC holds 51% control. 

GM's Chief Executive Officer Dan Akerson disclosed to the Journal that the companies intend to divide Shanghai GM into two units, namely operations and sales. General Motors would own 50% of the operations unit, which would create product decisions.

On the other hand, SAIC would keep 51% of the sales unit, allowing the Chinese vehicle manufacturer to book the revenue of the joint venture. The municipal authorities of Shanghai and the central government have yet to approve the deal. Akerson informed the Journal that he looks forward to obtain approval in the "intermediate to near term." In 2009, SAIC gained control of the partnership when a cash-strapped GM sold a 1% share for $84.5 million.

Since then, the two automakers have worked closely on several endeavors, including the sale of microvans in India, the launch of the new Chinese vehicle brand Baojun and the export of automobiles to South America. During the initial public offering of GM in 2010, SAIC obtained a 1% share in the Detroit vehicle manufacturer for around $500 million.

The new deal strengthens a relationship between SAIC and GM that is beginning to look like a worldwide alliance. Shanghai GM is already the largest vehicle manufacturer in China in terms of sales. SAIC is in a similar joint venture with Volkswagen AG, with a 50-50 share. The venture is called Shanghai Volkswagen.

If you liked the article, share on:

Comments

Recommended

Not so long ago, the 2018 Genesis G80 Sport made its debut at the 2016 LA Auto Show. But at that time, it did not have a price yet. And...
by - April 23, 2017
It seems like an increase in price has become a trend for automotive companies lately. Genesis isn’t alone when it comes to this. Subaru had just announced that the 2018...
by - April 23, 2017
Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries