Shanghai GM signs $607M deal to buy GM products

According to a $607 million agreement signed today, Shanghai GM will buy vehicles, machinery and equipment from its parent General Motors to meet the surging vehicle demand in the Chinese market, Bloomberg reported.

Vehicles of Buick, Chevrolet and Cadillac brands will be included in the deal, which was signed today in Phoenix during the ongoing visit to the US by Wu Bangguo, chairman of the China National People's Congress, GM said in a statement.

Shanghai GM is a passenger car venture equally owned by General Motors and SAIC Motor, China's largest automaker. Shanghai GM was formed in 1997 and sells more than 20 models under the Buick, Chevrolet, Cadillac and Saab brands.

China's stimulus plan has helped auto sales in the country jump 29 percent to 8.33 million vehicles in the first eight months of this year. Auto sales in China may rise 28 percent to 12 million this year, enough for the country to surpass the US as the world's largest auto market.

The stimulus program has boosted GM sales in China, the US auto giant's second-largest market, by 50 percent to 1.11 million vehicles during the eight-month period, surpassing the full-year tally for 2008.

Shanghai GM sold 63,303 vehicles in August, almost double the amount of a year earlier.