As reported earlier (on this blog and elsewhere) Chinese automaker SAIC will enter into a 50:50 joint venture with GM to sell small cars and light trucks in India. There’s not only the GM angle to this move. Viewed from the SAIC angle, memories from the recent past arise. In 2004, SAIC purchased a majority stake from Korean Ssangyong motors which ended in one big disaster with Ssangyong seeking bankruptcy protection. Most recently there have even been allegations of intellectual property theft. The Koreans blamed the Chinese, and the Chinese the Koreans – just what you would expect of two countries that haven’t head the best of relations throughout history. Now, what about India? What makes SAIC confident that the same challenges won’t emerge in India. Or, if they emerge, what makes them believe that they’re now better at handling them. And, would Indian consumers be interested in a predominantly Chinese car?
Posts Tagged ‘SAIC’
Over the years General Motors (GM) has become China’s second largest automaker, mainly through a 50:50 Joint Venture with Shanghai Automotive Industry Corporation (SAIC). This is an achievement for which GM should command a lot of respect as joint ventures with Chinese partners have been known to be tricky at times. Now GM has just announced that it will not only sell parts of its Indian operations to SAIC, but that it would also transfer an additional 1 % of the stock in the joint venture to them, thus raising their stake to 51 %. After this move, GM China has finally become Chinese, and this is may be a whole different ball game. To some degree the move is understandable as GM has been desperate for cash recently, but strategically the deal does not make an awful lot of sense (unless you’re SAIC, of course).