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Recently Chinese car makers are focusing on potential Indian vehicle markets. SAIC and General Motors jointly declared General Motors Shanghai Automobile (Hong Kong) Investment Company will be established with half-half investment. The new company will purchase former General Motors Indian Company and they will jointly develop Asian emerging market starting from India. It is revealed that the new company will put into operation in the first quarter in 2010, and it’s possible that SAIC General Motors Wuling minibuses will be produced firstly.
Wuling minibus
The registered capital for the new company is 100,000,000 USD, and the new Indian company will also be equally shared by both parts. Light and minibus products developed by Shanghai General Motors, PATAC, and SAIC General Motors Wuling will be sold in India via General Motors’ brand, marketing networks, two automobile plants and one engine plant there.
Given the sensitive relations between China and India, it’ll much easier for SAIC market development in India making use of General Motors brand and sales networks. Previously, General Motors’ business in India was not so successful for lacking of proper vehicles. And Wuling minibus will be popular in India for it’s been through in domestic rural areas.
The new joint investment decision indicates that cooperation between transnational company and Chinese enterprises have transferred from Chinese market to jointly developing global market. It’s a good opportunity for Shanghai General Motors to export to Asian market as well as global markets.
Currently, the number of car ownership per thousand persons is less then ten, but its consumption potential is just lower than China. According to predictions by Indian Automation Alley, Indian Automobile market will have double-digit increase in future, and Market volumes of passenger vehicles will be 40,000,000 units till 2015. In addition, profit margin in Indian automobile industry is comparatively higher compared with other emerging markets, which is also a significant reason to attract many foreign car makers.