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

One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 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