American automaker will get equal stake in partnership.
April 23, 2012
by The Canadian Press
BEIJING: General Motors Co. has agreed with its main Chinese partner to restructure their joint venture and give the American automaker an equal stake.
The president of GM’s China unit, Kevin Wale, said the partners were seeking Chinese government approval of the change.
GM and Shanghai Automotive Industries Corp. (SAIC) had a 50-50 partnership, but GM sold 1% to SAIC in 2009 to raise cash. That allowed SAIC to record the venture’s revenues on its own books under Chinese financial rules.
Wale said the restructuring would give GM and SAIC equal stakes in an engineering company to make key decisions. SAIC will own 51% of a newly created sales company, allowing it to keep recording sales revenues on its own books.
Meanwhile, Cadillac will build its new XTS luxury sedan in China in conjunction with joint venture partner Shanghai General Motors (SGM). XTS production will begin in China this fall.
Cadillac sold a record 30,000 vehicles in China in 2011, compared with 17,000 in 2010.
The XTS is not the first Cadillac assembled in China. The SLS Executive Sedan, an extended-length luxury car exclusive to China that began production in 2006.