General Motors Co. (GM)’s joint venture with SAIC Motor Corp. (600104) and Wuling Motors, which builds mini- commercial vehicles, will construct a third manufacturing plant in China and increase production capability to 2 million annually at the end of 2015.
The first phase of the facility is scheduled to start construction next year in Chongqing, according to a statement yesterday on GM’s website. That phase will cost 6.6 billion yuan ($1.06 billion), the company said. The plant will have the capacity of 400,000 vehicles and engines annually, GM said.
China is GM’s largest market by vehicle sales. The company through a different joint venture with SAIC also sells Buick and Chevrolet cars in China and its competitors in the country include Volkswagen AG (VOW) and Nissan Motor Co.
In addition to commercial vehicles, the Wuling joint venture began selling a Chinese car brand called Baojun in 2011. GM didn’t say which vehicles will be built at the new factory. The project is pending government approvals, Detroit-based GM said. The SAIC-GM-Wuling joint venture already operates factories in Liuzhou and Qingdao. The venture sold 1.29 million vehicles last year.
Shares of GM gained 1.1 percent to $25.28 at the close yesterday in New York.
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