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China’s Largest Automaker Opens Detroit Office

Could SAIC eventually target U.S. market?

by on Jul.02, 2012

Chinese automaker SAIC opens a new outpost in the Detroit suburbs.

China’s largest automaker has opened a new outpost in the Detroit suburbs to build closer ties with one of its principal partners, General Motors  – as well as some of the other North American automakers and suppliers.

Shanghai Automotive Industries Corporation USA Inc. expects to have 100 employees in its new operations center in Birmingham, Michigan, one of Detroit’s principal suburbs.  What that means in the long-term, especially with the Chinese expected to eventually target the American market, remains an unanswered question.

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Cooperation between U.S. and Chinese automotive companies is increasingly important in the new global automotive marketplace, SAIC Motor Chairman Maoyuan Hu said in a statement Friday.

Maoyuan said the opening of the new North American Operations Center in Birmingham marks an important step in creating a stronger ties between the US and Chinese automotive industries. With the increasing importance of cooperation between the major global automotive markets, this move by SAIC to strengthen its US presence is significant, he said.

“It is clear to see SAIC’s determination to deeply cooperate with US businesses and SAIC will continue to promote the development of exchanges with partners in the US,” he said. “I believe SAIC USA will enhance the operation of localization in the recruitment of professional, technical and management personnel and actively expand economic and trade activities,” Maoyuan said.

SAIC USA’s decision to expand its Operation Center in Michigan was based on a number of critical factors, including access to a highly trained work force, proximity to key global automotive partners – especially General Motors, proximity to world-class automotive parts suppliers and the favorable business environment in Michigan.

“I believe SAIC USA will continue to work as a bridge and link between SAIC Motor and the US auto industry. Further, we expect SAIC USA will continue healthy growth in this market and this will be a new chapter of mutually beneficial cooperation for China and the US, with the support of both countries,” Maoyuan said.

SAIC USA has a 30,000-square-foot facility on old Woodward in Birmingham that will eventually house nearly 100 people and will focus on three main areas of SAIC USA’s automotive business, including purchasing, logistics and technology and engineering.

SAIC USA parent company, Shanghai, China-based SAIC Motor, is the largest automotive manufacturer in that booming country. It is also General Motors Co.’s principal partner in China, involved in a variety of joint ventures, including the original Buick assembly plant in Shanghai.

But the Chinese parent has ties to a variety of other makers, as well, and is continuing to expand its own automaking operations.  Among its various operations are Shanghai GM, Shanghai VW, SAIC Motor Commercial Vehicle Company, SAIC-GM Wuling Automobile Co. and many others. In total SAIC Motor sold over 4 million vehicles in 2011 in the China market alone.

“Michigan is proud to be home to SAIC USA, the North American operations of SAIC Motor, and we are thrilled that the company is expanding its global presence here,” Michigan Governor Rick Snyder sai, adding that, “The company’s commitment to Michigan cements our standing as the automotive capital of North America.”

SAIC is just the latest Chinese automaker to set up a major operation in the U.S., however, and rival Geely already has a facility in downtown Los Angeles that includes a showroom it will be able to use if that maker ever moves ahead with plans to start selling product in the States.

Chinese makers have found it much more challenging than expected setting up distribution in the U.S., in part due to the slowdown in the market that resulted from the recent recession.  But most analysts eventually expect a Chinese presence here.  Whether SAIC would come to the U.S. with product of its own remains to be seen, though that’s a possibility the maker isn’t ready to discuss right now.

Paul A. Eisenstein contributed to this report.

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