US automaker General Motors Corp, which is lobbying for a bailout from the US government, is in talks to increase its stake in a Chinese joint venture that makes small, inexpensive vans and trucks, a media report said today.
GM Motors, which presently holds 34 per cent in the JV, SAIC GM Wuling Automobile Co, has entered into negotiations with the government of Guangxi province in southwestern China to up its stake, Hu Maoyuan, chairman of Chinese car maker Shanghai Automotive Industry Corp, the majority partner in the JV, was quoted by the Wall Street Journal as saying.
The move, the paper said quoting people close to GM, is aimed at consolidating GM's ownership of Wuling and integrating it more into the GM group as it tries to use Wuling as a launching pad to get low-cost cars into other fast-growing emerging markets.
However, Hu told the paper that Shanghai Automotive, which owns 50.1 per cent of the Wuling venture, wasn't involved in the talks. State-owned Liuzhou Wuling Motors Co owns the remainder, and GM apparently would be buying some of that stake, the Journal said.
An official at the Guangxi State-Owned Assets Supervision and Administration Commission, the regional government agency that owns Liuzhou Wuling, confirmed that it is in talks with GM, but wouldn't elaborate, the paper said. Officials at Liuzhou Wuling couldn't immediately be reached for comment, it added.
A GM spokesman, the Journal said, declined to say whether GM is engaged in talks with Liuzhou Wuling or the Guanxi government. "We communicate with our partners regularly and those discussions are private and confidential," the Shanghai-based spokesman said. "We have nothing to announce at this point."
Detroit auto executives, looking for government support, had told US congressional leaders last week that if one or more of their companies fails, millions of Americans could lose their jobs, the paper noted. GM last week warned that it faced a significant risk of financial collapse by the middle of next year.
The Wuling joint venture manufactures Sunshine vans, with one-litre engines, that sell for about $3,700. The Chevy Spark, a minicar also made by Wuling, sells for about the same price. GM has looked to Wuling as an important part of its effort to boost sales in emerging markets to offset declining sales in the US.
