Shanghai Automotive Industry Corporation and General Motors Company announced they are expanding their cooperation in Asia and targeting the Indian and other emerging auto markets by forming a Hong Kong-based firm, General Motors SAIC Investment Limited.
As part of the deal, the state owned SAIC is taking 51% controlling interest of Shanghai GM since cash-starved GM is selling 1% if its 50% share.
Though largely symbolic, it will be viewed as a setback for GM in Asian cultures, which put an emphasis on “face.”
It is also an indicator of how fragile GM’s financial condition remains — in the latest quarter it lost $1.2 billion — as far healthier automakers regroup for a new emerging world order that sees the European and American markets depressed while emerging markets in Asia grow rapidly.
Earlier in the week GM CEO Fritz Henderson left the company.
GM said in a statement that “this will assist China’s leading listed automotive company in consolidating Shanghai GM revenue into SAIC Motor, which will provide investors a clear understanding of its business.”