JV

SAIC, GM eye India market

(China Daily/Agencies)
Updated: 2009-10-17 11:40

SAIC Motor Corp, China's biggest automaker, is in talks with its partner General Motors to explore new business opportunities that include India, a source with knowledge of the matter said on Friday.

India's Economic Times reported that the Shanghai-based automaker was close to taking a stake in General Motors India but did not provide further details.

The source told Reuters that discussions between SAIC and GM were aimed at expanding their ties, including opportunities in India, one of the world's fastest-growing auto markets.

The US automaker produces Cadillac, Buick and Chevrolet models in Shanghai with SAIC. The partners also manufacture Wuling-brand minivans and pick-up trucks in southern China.

"GM's discussions with SAIC include business opportunities in India, but no final decision has been made on how they will cooperate," the source said.

The two carmakers have been in talks about introducing Wuling light commercial vehicles in India, where economic growth is spurring demand for small trucks, GM India's Managing Director Karl Slym said last month.

"The Indian market has huge potential for cheap, small cars and the market is booming," said Klaus Paur, North Asia director for market research company TNS. "It would be a good move for GM."

SAIC and GM both own stakes in SAIC-GM-Wuling Automobile Co, the largest mini-vehicle maker in China.

SAIC said only that it was continuing discussions on further business opportunities with GM, while GM had no comment on the matter.

The GM-SAIC partnership is one of the most successful tie-ups between a foreign and local automaker, helping both to be dominant players in a market where Volkswagen AG, Toyota Motor and Ford Motor are also competing fiercely.

SAIC, the maker of Roewe sedans popular with the young Chinese business elite, forecast a more than 70-percent jump in its net profit in the first nine months, after reporting a 47-percent rise in vehicle sales.

GM sold 55.6 percent more vehicles in China during the period, leading a 34.24-percent gain of the overall market. Its China chief Kevin Wale said this week the Detroit automaker aimed to outpace the growth of the market again in 2010.

Analysts are positive about a further expansion of SAIC and GM's partnership, especially in fast-growing emerging markets, such as India, where demand may match China, which topped the United States as the world's largest auto market in January.

"It makes sense for SAIC and GM to forge closer ties and explore new opportunities in other markets," said Qin Xuwen, an analyst with Orient Securities. "I won't be surprised if they join hands in India which is only next to China in terms of growth potential."

"The Indian market has huge potential for cheap, small cars and the market is booming," said Klaus Paur, North Asia director for market research company TNS. "It would be a good move for GM."