General Motors has formed a 50-50 joint venture with FAW Group to make light trucks in China for the first time – in a further sign of the US vehicle maker’s increased focus on the Chinese market in the face of weak US sales.
Total investment in the joint venture with the Chinese vehicle maker would be RMB2 billion ($293m), GM said yesterday, under a deal that the two companies had been negotiating for several years.
The partnership with FAW, called FAW-GM Light Duty Commercial Vehicle and one of its vehicles shown in the illustrration, will be GM’s third joint venture with a local vehicle maker but the first to produce trucks.
GM’s other Chinese joint ventures produce passenger cars and mini commercial vehicles. GM passenger car sales in China rose 52% year-on-year in July, traditionally a weak month, according to figures from JD Power, the car consultancy.
Total Chinese light vehicle sales in July were up a remarkable 60% year-on-year at 1.03m vehicles, the JD Power figures showed.
Earlier this year, China overtook the US to become the world’s largest vehicle market.
The Financial Times said JD Power’s latest report on the Chinese light vehicle market forecasts that passenger vehicle sales will rise 25% this year and light commercial vehicles sales will be up 39%t — largely because of a government stimulus program aimed at boosting sales of small cars and vehicles in rural areas.