China Business News
Beijing: China is about to approve a proposal from U.S. auto giant General Motors Co for building a plant in the country worth 7 billion Yuan (US$1.1 billion), according to a statement from a provincial government. The world's largest automaker has an existing passenger-car joint venture (JV) with China's SAIC Motor Corp, and this JV will operate the new factory.
According to the statement on the website of the Hubei Environmental Protection Bureau, the plant will have an annual production capacity of 300,000 vehicles and will be located in Wuhan city. Shanghai-based spokesman Jerry Ma for Shanghai GM said the company is satisfied with the new plant's capacity arrangements but has not decided yet on locating the plant in Wuhan.
The statement is surprising as barely two months have passed since the central government announced its decision to terminate a seven-year old policy of wooing foreign firms at investing in China's automotive industry.
The new plant is expected to raise the passenger-car output capacity of GM by some 15 percent, up from about 15 million units produced by the company in 2011, according to estimates by research firm IHS Automotive.