A newly-acquired plant of SGM, the car joint venture between General Motors (GM) and Shanghai Automotive Industry Corp (SAIC), has been officially launched in Shenyang, capital of Northeast China's Liaoning Province, the venture said yesterday.

SGM will transfer production of its GL8 multi-purpose vehicle (MPV) to the new plant, named SGM Beisheng Automobile Co Ltd, at the end of September this year, the venture said in a statement.

Beisheng, which will have an annual production capacity of 50,000 vehicles, is based on a former joint venture between GM and Jinbei Automobile Co, a Shanghai-listed van maker based in Shenyang.

Jinbei GM, established in 1998 with a total investment of US$230 million, stopped production of Chevrolet sport utilities and pickups earlier this year because of sluggish sales.

In March, SGM, GM and SAIC merged the joint venture by controlling 50, 25 and 25 per cent stakes respectively.

Beisheng is SGM's third manufacturing plant in China, the world's fastest-growing car market.

At the end of 2002, SGM and the two parent firms paid 900 million yuan (US$108.7 million) to acquire a plant in East China's Shandong Province, which was controlled by the local government and has assembled cars from South Korean Daewoo Motor in the past.

In April last year, the plant in Shandong started to make the Sail compact car which was built at SGM's plant in Shanghai previously.

The plant has a planned production capacity of 100,000 cars annually.

SGM's plant in Shanghai now has an annual capacity of 200,000 cars and is also producing the Buick Exelle and Buick Regal sedans.

The Shanghai plant will introduce Cadillac luxury vehicles later this year.

"The launch of Beisheng will help SGM expand production capacity swiftly and continue to introduce new products to enter more market segments," said Chen Hong, president of SGM.

All activities of Beisheng will be incorporated into SGM, including product planning, manufacturing, purchasing, quality control, marketing and sales, and services.

Beisheng has invested nearly 50 million yuan (US$6 million) to rebuild its production line, the statement said.

SGM's sales jumped by 79 per cent year-on-year to 161,000 vehicles in the first seven months of this year, including more than 16,700 GL8s.

Officials from SGM said it was expected to surpass Volkswagen's joint venture in Changchun, Northeast China's Jilin Province, to become the second biggest passenger car producer in China this year.

The German automaker's other joint venture in Shanghai with SAIC has been the No 1 passenger car maker in China for almost two decades.

GM also has a mini vehicle joint venture with SAIC and a local partner in South China's Guangxi Zhuang Autonomous Region.

The world's largest automaker announced in June that it would spend US$3 billion jointly with SAIC and more than double its annual production capacity to 1.3 million vehicles in China over the next three years.

(China Daily August 11, 2004)