GM increases its stake in SAIC-GM-Wuling

• Source: Gasgoo
• [17:01 January 21 2011]
• Comments

Liuzhou Wuling Motors Co., Ltd., Guangxi-based compact van manufacturer, said that it would sell 10% of the stock it holds in the SAIC-GM-Wuling Automobile Co. joint venture to its partner General Motors China, Beijing News reported Thursday. In exchange, GM will supply Wuling with vehicle technology resources.

GM told reporters that it has been planning to increase its stake in the company since last year, and that it has already received the government's approval to carry out the transaction. GM will pay Wuling $51 million as well as supply the company with automotive technology service until 2013. With completion of the transfer, GM's share in the company will rise to 44%, while Wuling’s will drop to 5.9%. SAIC Motor Corp., still the company's largest shareholder, will continue to possess 50.1% of the company. It is believed that this transaction will be important to GM’s continuing expansion, as the company plans to increase exports of Wuling-branded vans to the Indian market in the near future.

Analysts believe that the motivating factor behind the transaction was SAIC-GM-Wuling's exemplary performance in the Chinese automotive industry last year, with the company's 2010 sales leading the nation for the fourth year running. 2.35 million Shanghai-GM branded vehicles sold last year, while Wuling managed to sell 1.23 million vehicles.