GM Adding 4TH Assembly Plant in China
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| No one could have predicted the mercurial growth in China's auto industry. Carmakers are struggling to keep up with demand. |
It seems every automaker is investing millions to claim their piece of the world's largest virgin car market lately, and General Motors is at the forefront. The winner of this strategic game of chess, it is presumed, could eventually become one of, if not the largest vehicle manufacturer on the planet.
The world's current number one automaker is spending in China again, over $100 million USD to purchase a 25% stake in Yantai Bodyshop Corp., a move that will give it the use of the automaker's plant in Eastern China's Shandong Province to expand capacity of its popular small car, the Sail.
Longtime GM partner, Shanghai Automotive Industry Group, would take another 25% stake in the company, while the Shanghai GM joint venture would acquire the remaining Yantai shares.
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| Yantai is located near the end of the Shandong Peninsula, and overlooks Liaodong Peninsula across the Bohai Sea and Huanghai Sea to its north. The city has total area of 13,000 square km and a total population of 6.43 million, in which 4.45 million are peasants. |
"Shanghai GM cannot maintain its industry leadership position in China if it does not continue to grow with the market," stated Philip Murtaugh, Chairman and CEO of GM China.
Simultaneously the Chinese government has been encouraging the country's auto manufacturing base to consolidate. Like the automotive industry throughout the western world in its infancy, China has hundreds of small manufacturers in all parts of the country.
Ironically, the country's current multi-brand status appears more free enterprise oriented than how the world's major multinational automakers and China's government envision its future.