GM Unfazed by Chinese Partner’s Plans

2006 Roewe 750, Beijing Auto Show

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General Motors Corp. executives say they are not concerned about the plans of GM’s principal Chinese partner, Shanghai Automotive Industry Corp., to develop their own brands and export vehicles fromChina.

“We knew right from the beginning that they planned to develop their own brands,” said Nick Reilly, GM group executive for Asia Pacific Region.

The Chinese government, SAIC’s principal shareholder, has never made any secret of its ambitions to develop an export business. “There is great pressure to create exports,” added Reilly, who noted SAIC has already begun to export to markets in Russia and Chile a small number of vehicles built by Shanghai GM, its 50-50 joint venture with General Motors.

“We have no intention of backing away the partnership,” Reilly, who emphasized that GM will continue to share its expertise and latest technology with SAIC. SAIC is also one of Volkswagen’s principal partners in China and is quickly could soon become one of the world’s top ten automakers.

SAIC also acquired rights to the remnants of the old MG Rover Group after it collapsed last year and is in the midst of launching a new model called the Roewe that based on design work done at Rover.

During the previews for the Beijing Motor Show, however, SAIC officials said plans for exporting vehicles to the U.S. have been placed on hold. Nevertheless, one of the big stories to emerge from the Beijing show previews was the rapid progress Chinese automakers generally have made to make their exterior designs more appealing. Designs are quickly catching up with those done in Europe and North America and Chinese manufacturers have not hesitated to import help from Europe and North America .

The quality of Chinese-made cars, however, still isn’t quite up to world-class standards, primarily because the supplier base in China is still moving to adapt to standards set by the auto industry globally, Reilly said. However, that’s also changing quickly.

“Clearly in the future they’re going to become more competitive,” Reilly said.

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