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Troubled automaker GM opens new plant in China
Beijing (AFP) Dec 17, 2008 Beleaguered auto giant General Motors opened a new joint venture factory in northeast China Wednesday, as it sharply cut back capacity in the United States due to the rapid economic downturn. The joint venture plant in Shenyang city, inaugurated as the iconic American brand is fighting for its life amidst the global crisis, will mass produce the compact Chevrolet Cruze from the second quarter of 2009. "The opening of this plant is part of GM's ongoing pledge to grow our operations in China," said Kevin Wale, president of the GM China Group, in a statement. The plant, capable of producing 150,000 vehicles a year, will lead to at least a 10 percent increase in GM's total China-based capacity, which it said was "over a million units". It will be operated by General Motors China and its joint venture partners Shanghai Automotive Industry Corp. Group and Shanghai GM. The joint venture plant is the second for GM in Shenyang. The first plant makes the Buick GL8 and the Buick FirstLand executive wagons and boasts an annual capacity of 50,000 vehicles. The new opening comes after GM said Friday it was idling 30 percent of its North American production "in response to rapidly deteriorating market conditions." The auto giant, which has been pleading for an emergency US government loan to avert collapse, said the action comes in response to a sharp industrywide drop in November vehicle sales, including a 41-percent drop for GM. Despite the troubles in the United States, the China market has remained profitable for the automaker. It was the market leader here until last year when it was overtaken by Volkswagen in sales. China's auto sales fell 14.6 percent year on year in November, according to industry association figures, as consumer confidence showed further signs of weakening amid the economic slowdown. Automakers sold 685,100 units in China in November, down 4.3 percent from the previous month, the China Association of Automobile Manufacturers said in a recent statement. China's auto sales rose 8.4 percent on-year in October when car makers offered big discounts after two consecutive months of single digit declines in August and September. "In a developing market in China, some volatility is to be expected and we've had some impact from the global financial crisis. So the market is finally down," Henry Wong, GM's Shanghai-based spokesman, told AFP Wednesday. "But over the long term, GM and the partners here are quite optimistic about the market. It still has great potential." GM said last month it was "very profitable" in China, and that it was continuing its investment here. The joint venture's main plant in China is in Shanghai. Wong said Wednesday it was unlikely that GM would be criticised for opening a new plant in China while closing down capacity at home. "I don't know if anybody would criticise us for that because this market is growing," Wong said. "China is a very important growth market for General Motors. Therefore we have to stay with our game plan here." Share This Article With Planet Earth
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