GM Sells Shanghai GM Majority Control to SAIC

SAIC will soon hold majority control in GM's flagship joint venture in China as the company will purchase 1 percent from the US-based manufacturer. At this time, the stakes in Shanghai GM are 50-50 but SAIC might gain control of an additional 1 percent, gasgoo.com writes. Still, General Motors would retain equal voting rights in the joint venture, the source added.

A thing worth mentioning is that SAIC might pay around 20 percent of the overall Shanghai GM value for the 1 percent stake. Additionally, General Motors has the option to buy it back at a later date.

“Changes in the worldwide economy have created new opportunities in emerging markets,” according to Hu Maoyuan, Chairman of SAIC. “By leveraging our individual assets and those of our China joint ventures, SAIC and GM are in a strong position to introduce competitive products outside China that will satisfy the needs of consumers in India and other high-potential global markets.”

“Over the past decade, SAIC and GM have created one of the world's most successful automotive industry partnerships,” said Nick Reilly, GM Executive Vice President and President of GM International Operations. “Both companies felt this was the proper time to deepen cooperation beyond China’s borders in order to enhance our partnership as part of our individual companies’ long-term growth strategies.”

On a separate front, General Motors is also preparing a strategic move in India where it wants to give half of its local operations to SAIC and establish a similar 50-50 joint venture. The deal is still in pending mode and awaiting the final approval from India's regulator body.