General Motors established its Shanghai GM joint venture with Shanghai Automotive Industry Corporation (SAIC) in 1998, but in 2010 the U.S. automaker sold one percent of its stake to the Chinese company. Now, according to Detroit Free Press, GM has bought back that share.
One percent may not sound like much, but the deal brokered between GM and SAIC in 2010 resulted in the Chinese company paying General Motors some $84.5 million and helping to secure a $400 million line of credit. For those payments, SAIC gained majority control of Shanghai GM at 51 percent. Specifics of the deal to return the stakeholders to a 50-50 split have yet to be discussed, but the transaction does still need final approval by the Chinese government.
Shanghai GM is just one of General Motors’ 10 different joint ventures in the rapidly expanding Chinese market. In March of 2012 alone, all of GM’s joint ventures combined sold 257,944 vehicles between the Chevrolet, Buick, Cadillac, Opel, Wuling, Jiefang, and Baojun brands. In both 2010 and 2011, GM moved more than two million cars per year in China, being the first automaker to ever surpass that milestone in 2010.
The move to recapture its equal partnership with SAIC is just one move General Motors has done is recent months to show that it is serious about investment and sales in the world’s largest car market. Just last week, it was announced that Shanghai GM will build and sell Cadillac ATS, CTS, and XTS models in China for Chinese consumption, joining the long-wheelbase SLS sedan that has previously been built exclusively for the Chinese market.
Source: Detroit Free Press