Rare Earth, Siemens tie-up

Rare Earth, Siemens tie-up

China Rare Earth Holdings Ltd said yesterday that it will set up a joint venture in China with Siemen’s OSRAM to produce and sell phosphor products for the lighting industry.

The joint venture, which will have an investment of 43.5 million euros ($65.10 million), will be 49.9 percent owned by China Rare Earth and 50.1 percent by OSRAM. The joint venture will have an annual production capacity of up to 2,000 tons of tri-band phosphor when it starts operating.

Novartis aims to quintuple China sales

Novartis aims to quintuple China sales

Swiss pharmaceutical giant Novartis AG has said it aims to quintuple China sales and be one of the top 5 transnational firms in the domestic over-the-counter (OTC) drugs market by 2014.
The company, which is planning to sell 200 million yuan worth of OTC products in China this year, said it is looking at sales of 1 billion yuan in five years’ time.
“We are going to expand in the China market by releasing over 20 OTC drugs by 2011,” said Warren Jiang, head of Novartis’ OTC division in China.
The company now has three OTC drugs in China, but most of its OTC sales come from only one drug, Voltaren Emulgel, an anti-inflammatory pain-relief gel.
Although Novartis is ranked 4th in the global OTC market with annual sales of $3 billion, its market share in China is small as it entered the OTC market only in 2007.
Novartis may also acquire other local firms to better compete in the Chinese OTC market, Jiang hinted.
“Mergers and acquisitions are our important strategies in the OTC market, especially here in China,” said Jiang.
“Now, we are in active talks with potential candidates,” said Jiang, adding that its rival Bayer’s acquisition of Chinese brand White & Black has enhanced the company’s confidence about such opportunities in the country.
Although many home-grown Chinese pharmaceutical companies are less willing to sell their businesses due to the improved economic conditions, Jiang said he was positive about an M&A deal in China.
If such a deal is reached, Novartis may further deepen control in the China market and establish more channels for its OTC business.
The company has set channel development as its prime goal this year. It would triple the number of sales representatives and expand distribution channels, which now cover 90 cities, this year, the company had said earlier.
Novartis is also keen to introduce more OTC drugs, which have gained considerable popularity in Western markets, into China, Jiang said. The key drug categories include analgesics, cough, cold, skin care and smoking-cessation medicines.
Jiang said Novartis would go in for a publicity blitz for Voltaren Emulgel, its global blockbuster, starting next year to further boost its sales in China.
“China has been a very attractive market,” said Jiang. “For us, to develop in China is more important than making profits.”
The Chinese OTC market, worth anywhere between 100 billion ($14.65 billion) and 200 billion yuan, is growing by 18 to 20 percent annually, said Peng Haizhu, an analyst with Huatai Securities. The bigger pie may attract more players into the OTC market, he said.

Harbin, Budweiser see double-digit growth

Harbin, Budweiser see double-digit growth

Harbin and Budweiser beers, two core brands of Anheuser-Busch InBev (AB InBev) China, reached “double-digit” sales volume growth for the summer season, buoyed by the firm’s comprehensive marketing initiatives and expanding geographical reach.
“Our aggressive distribution expansion of Harbin brands to untapped regions by using AB InBev’s sales network has almost doubled sales increases for the peak selling season in its traditionally strong market in the Northeast,” Rex Wong, vice president of marketing and new products for AB InBev China, told China Business Weekly.
Wong said the firm will expand its marketing investment in Harbin to more provinces such as Guangdong, Zhejiang and Hunan. The goal is to reach 187 different markets this year and 200 by 2010, up from 157 markets in 2008.
“We will make it a national beer rather than a local brand,” Wong said.
In 2004, what was then Anheuser-Busch took over Harbin Brewery, China’s oldest and then fifth-largest brewer, for almost $720 million.
According to research firm Euromonitor International, the total sales volume of Harbin beer grew 5 percent in 2008, to equal the overall market increase rate.
“Its summer sales have surpassed our anticipation of 10 percent in 2009, probably due to its expanding distribution in supermarkets and wider advertising reach geographically,” said Joy Huang, Euromonitor’s alcohol analyst based in Shanghai.
Huang said Euromonitor expected the overall beer sales volume in China to rise 5.7 percent this year.

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 InBev beats estimate, sells beer unitWong said Budweiser beer, another mainstay brand under Belgium-based AB InBev, also enjoyed “double digit” growth in China in the same period, even though its growth rate was not as strong as Harbin.
“It’s not easy for high-end brand Budweiser to have such growth in light of its already established leading position in China,” Wong said, crediting the growth to intensive marketing promotions such as the Bud Music Kingdom campaign to attract young consumers.
Euromonitor reported that Budweiser topped China’s premium beer market with 46 percent market share in 2008. Euromonitor anticipates the brand will increase by 9 percent in sales volume this year.
“We’re now actively seeking dealers and expanding our distribution to penetrate inland and into smaller areas,” Wong said.
But analysts said the road to lower-tier cities could be rough.
“Budweiser’s main strength is in coastal cities. Small cities and towns are more familiar with local brands, with their low cost and high recognition,” Huang said.
Beer market data provider Plato Logic projected per capita beer consumption in China will reach 35 liters per capita in 2010, up from 17.5 liters in 2000.

GM satisfied with Hummer sale terms

GM ’satisfied’ with Hummer sale terms

Q: Sichuan Tengzhong is paying about $150 million for the Hummer unit, significantly lower than its valuation in bankruptcy filings last spring. Are you satisfied with the deal? What do you think of the prospects for approval by Chinese authorities?
Fritz Henderson: We have not made specific terms public. I have read the same article as you did regarding the $150 million, but am not in a position to confirm it.
We are satisfied with the terms and conditions of the deal, so the answer is yes. We went through a competitive auction process, several parties were interested and Tengzhong came forward.
They are very serious. They put a significant amount of time, effort and attention into this deal. We negotiated – and yes, we are satisfied.
In terms of the approval process, we’ve had dialog with Tengzhong. It’s pretty much their responsibility as the buyer, but I think they are confident and hopeful. We will support them in whatever they need to obtain approval for this.
Beyond that I really couldn’t comment. It’s obvious that they feel strongly that the project should receive approval.
Q: Why did you choose Shanghai as the location for GMIO and Nick Reilly as its leader?
A: In 2004, we moved our Asia-Pacific headquarters to China, specifically Shanghai. We did so because we were very clear then that China was the axis of our operation here in Asia. We have so many operations in China, Korea and Japan – as we talked about reorganizing the company and the location of international operations, it was very logical to place it right here. China is the largest market for us outside the US.
Nick’s responsibility is for everything outside North America. China is such an important market for us in many ways and it will be even more so in future.
Q: How do you utilize the China market and manufacturing resources to promote your low-price strategy?
A: We have the benefit of having GM development centers that are actively involved in low-cost cars. Here, the PATAC (Pan Asia Technical Automotive Center, a research and development unit based in Shanghai), for example, is in charge of developing the new Sail, the next car to be launched. It will focus more on the price point.
We are going to continue to improve our operations here in China. Through PATAC as well as Shanghai GM and SGMW (its joint venture that makes the Wuling minivan), we are going to develop low-cost products for different market segments.
You are going to see continued innovation and collaboration, potentially between operations in Brazil, Korea and China to pursue products, powertrains and technologies that have lower costs and more profitability in fast growing markets.
Q: What new models are you planning to launch in China this year and in the near future?
A: Shanghai GM will unveil an important new small car before the upcoming Chinese New Year, the Chevrolet New Sail.
Primarily designed by PATAC in line with GM’s global vehicle development process, the new car is tailor-made for Chinese customers and is expected to have great potential in other emerging markets
By the end of 2010, GM will roll out five new models in China under its Buick brand and five new Chevrolet models.
Over the next five years, GM will introduce more than 30 all-new or refreshed models across all of its brands in China.
After its restructuring on July 10, GM’s preliminary global market share in the third quarter of 2009 was 11.9 percent, up 0.3 percentage points from 11.6 percent in the first half of the year. The company had a 12.4 percent global market share in 2008.
In the first nine months of this year, GM and its joint ventures sold 1,292,549 vehicles, a 55.6 percent increase from the same period of 2008, setting a new sales record.

Q: As China surpassed the US as the world largest auto market, what do you think of GM’s future?
Nick Reilly: We haven’t changed our investment plan. We always thought that the Chinese market is going to be extremely important. The fact is that it became number one this year. It has much to do with weakness of the US market as it does with strength in China.
We are very happy to invest in China and we are going to continue to do that. We invest billions of dollars a year.
Q: In recent years, many Chinese car companies are interested in overseas mergers and acquisitions. What is your view?
A: I think that is fine. There is no reason why a Chinese company shouldn’t purchase a foreign company. I believe China auto companies will play an increasingly important role in the global auto market.

HP wants larger share of rural PC market

HP wants larger share of rural PC market

Global PC giant Hewlett-Packard is speeding up its business in rural China, eager to win a larger share of the growing, but largely untapped market.
Chinese rural residents account for half of China’s population, but the average per capita annual income is around $700.
Although it’s a market that’s difficult to penetrate, market research firm Gartner Inc said affordable prices and free add-ons will attract many who never owned a personal computer.
The Chinese government’s rural PC program is expected to create 1.5 million new PC shipments in China this year.
More than 400,000 PCs were sold by August under the program, which gives rural residents a 13 percent rebate when they purchase selected products.
About 40 percent of PCs sold under the rural subsidy program were from China’s Lenovo, while US-based HP accounted for about 1 percent of sales, according to the Ministry of Commerce.
Although HP is not a newcomer in China’s rural market, its rural computer market was previously targeted at coastal regions where farmers earn more than in western regions.
HP’s Chinese rival, Lenovo, has been working to expand its reach to rural counties and villages since 2004 and currently holds 42.4 percent of China’s rural computer market.
Founder, another Chinese computer maker, has also been expanding into rural areas since 2004 and now has 5,000 shops in towns and villages.
HP’s market share in China increased to 14 percent during the first half of this year, up from 5 percent in 2005, according to research firm IDC. The company now has 7,000 stores and 10,000 resale partners in China.
HP is also planning to establish 700 new county-level stores within the next three years.
Isaiah Cheung, vice president and general manager of the Personal Systems Group for HP China and Hong Kong, began introducing HP products to third-tier cities and remote, rural areas six years ago.
HP has since been growing at twice the industry average, making it the largest foreign computer maker in China, second only to domestic market leader Lenovo.
Cheung declined to discuss HP’s rural market share in China, only saying that third-tier rural districts account for 40 percent of HP’s market share.
In May, HP launched its “Harvest Plan” in joining China’s PC subsidy program.
The Ministry of Commerce in March announced four large global PC vendors and 10 domestic PC markers as winners of the bid to supply PCs to 13 provinces for one year as part of the rural computer subsidy program.
All participating PC models are priced from $290 to $510 each, which is lower than the traditional retail price. Of these models, 67 percent are sold for less than $500 each.
“The Harvest Plan is more focused on the western region this time, and the ‘five 100′ will be mainly in the western part,” Cheung said.
The “five 100″ refers to HP’s donations of 100 HP computer centers, 100 information caravans and 100 computer specialist training villages, as well as programs to train 100 teachers this year.

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“The rural area is not a mature market, so HP not only hopes to earn money from the market, but we also would like to foster a market by boosting rural informationization,” he said.
Wanzikou, a fishing village in East China’s Shandong province, has a population of 3,000 and an average annual household income of $7,000. In the village, 70 percent of households chose HP computers.
The village is also one of the 100 HP computer centers, where HP dispatched information specialists to teach villagers how to use computers and the Internet.
Sun Yujiao, 30, a housewife who sells seafood at the online commerce site Taobao, finds HP’s “Agriculture Trading Platform” software helpful to her business.
“It has information such as curing sick white shrimp and, moreover, I can find buyers through the trading center,” Sun said.
“I bought a computer three years ago and am now considering buying a laptop, since the price is fairly affordable,” she said.
HP sells information systems along with their computers to rural customers.
Every HP product comes with software that helps farmers master agricultural knowledge and obtain updated market information.
The PCs also were built to accommodate unpredictable variations in power supplies, which tend to be unstable in many rural regions.
Each HP computer is installed with software that allows adults to monitor their children’s activities on the Internet.
HP has sent vans with information specialists to rural elementary schools to teach children, as well as farmers, how to use its PCs.

GM satisfied with Hummer sale terms

GM ’satisfied’ with Hummer sale terms

Editors’ note: Public opinion and insider views vary widely on Sichuan Tengzhong’s surprise bid to buy and continue producing GM’s Hummer brand. China Daily reporter Zhang Ranran recently interviewed both GM President and CEO Fritz Henderson and Nick Reilly, GM executive vice-president and head of the auto giant’s recently formed GM International Operations (GMIO), to hear their views on the potential sale.
Q: Sichuan Tengzhong is paying about $150 million for the Hummer unit, significantly lower than its valuation in bankruptcy filings last spring. Are you satisfied with the deal? What do you think of the prospects for approval by Chinese authorities?
Fritz Henderson: We have not made specific terms public. I have read the same article as you did regarding the $150 million, but am not in a position to confirm it.
We are satisfied with the terms and conditions of the deal, so the answer is yes. We went through a competitive auction process, several parties were interested and Tengzhong came forward.
They are very serious. They put a significant amount of time, effort and attention into this deal. We negotiated – and yes, we are satisfied.
In terms of the approval process, we’ve had dialog with Tengzhong. It’s pretty much their responsibility as the buyer, but I think they are confident and hopeful. We will support them in whatever they need to obtain approval for this.
Beyond that I really couldn’t comment. It’s obvious that they feel strongly that the project should receive approval.
Q: Why did you choose Shanghai as the location for GMIO and Nick Reilly as its leader?
A: In 2004, we moved our Asia-Pacific headquarters to China, specifically Shanghai. We did so because we were very clear then that China was the axis of our operation here in Asia. We have so many operations in China, Korea and Japan – as we talked about reorganizing the company and the location of international operations, it was very logical to place it right here. China is the largest market for us outside the US.
Nick’s responsibility is for everything outside North America. China is such an important market for us in many ways and it will be even more so in future.
Q: How do you utilize the China market and manufacturing resources to promote your low-price strategy?
A: We have the benefit of having GM development centers that are actively involved in low-cost cars. Here, the PATAC (Pan Asia Technical Automotive Center, a research and development unit based in Shanghai), for example, is in charge of developing the new Sail, the next car to be launched. It will focus more on the price point.
We are going to continue to improve our operations here in China. Through PATAC as well as Shanghai GM and SGMW (its joint venture that makes the Wuling minivan), we are going to develop low-cost products for different market segments.
You are going to see continued innovation and collaboration, potentially between operations in Brazil, Korea and China to pursue products, powertrains and technologies that have lower costs and more profitability in fast growing markets.
Q: What new models are you planning to launch in China this year and in the near future?
A: Shanghai GM will unveil an important new small car before the upcoming Chinese New Year, the Chevrolet New Sail.
Primarily designed by PATAC in line with GM’s global vehicle development process, the new car is tailor-made for Chinese customers and is expected to have great potential in other emerging markets
By the end of 2010, GM will roll out five new models in China under its Buick brand and five new Chevrolet models.
Over the next five years, GM will introduce more than 30 all-new or refreshed models across all of its brands in China.
After its restructuring on July 10, GM’s preliminary global market share in the third quarter of 2009 was 11.9 percent, up 0.3 percentage points from 11.6 percent in the first half of the year. The company had a 12.4 percent global market share in 2008.
In the first nine months of this year, GM and its joint ventures sold 1,292,549 vehicles, a 55.6 percent increase from the same period of 2008, setting a new sales record.

Q: As China surpassed the US as the world largest auto market, what do you think of GM’s future?
Nick Reilly: We haven’t changed our investment plan. We always thought that the Chinese market is going to be extremely important. The fact is that it became number one this year. It has much to do with weakness of the US market as it does with strength in China.
We are very happy to invest in China and we are going to continue to do that. We invest billions of dollars a year.
Q: In recent years, many Chinese car companies are interested in overseas mergers and acquisitions. What is your view?
A: I think that is fine. There is no reason why a Chinese company shouldn’t purchase a foreign company. I believe China auto companies will play an increasingly important role in the global auto market.

Sandvik is growing its Asian hub

Sandvik is growing its Asian hub

With its largest mining and construction assembly center officially launched last month, leading high technology and engineering group Sandvik further accelerated its China expansion plan.
The new 120,000-sq-m center, located in the Shanghai Jiading Industrial Zone, is seven times larger than the old factory built by Sandvik Mining and Construction (SMC) in 2005 at the same location, and can produce more than 3,000 units for domestic and global mining and construction machinery clients of the Swedish group.
The center, involving an investment of millions of yuan, will also act as the assembly and logistics hub for SMC’s global business.
Its annual production value is expected to reach 2 billion yuan ($292.95 million) by 2012, according to the Sandvik Group, which has three business sectors: mining and construction machinery, cutting tools and new materials.
Global strategy

The new center also represents an important positioning in the China market for Sandvik’s global development strategy, according to Svante Lindholm, president of Sandvik China Holding Co.
In addition to the new assembly center, the Fortune 500 company opened six new plants in China during the last two years, even though the world is experiencing an economic downturn.
Three new factories were built in Wuxi in Jiangsu province. They are operated by the Sandvik business sectors of SMC, Walter and Sandvik Hard Materials. Respectively, they manufacture cemented carbide tools for mining equipment, design and produce cutting and specialty tools, and cemented carbide-wear parts.
A new plant in Qingdao is engaged in the production of new materials. The other two plants are in Zhenjiang in Jiangsu province and produce high technology tubes.
“The financial crisis really affected the global economy, including China, but we still obtained significant development in China. China is still the best-performing market in the downturn, and China is expected to be one of our largest markets,” Lindholm said.
Sandvik cut production in Europe and North America due to shrinking demand in developed countries hit hard by the recession. Its business in Australia, Latin America and Africa is flat, according to the company.
Asia, especially China, has become the Swedish company’s focus. For example, the new assembly center in Jiading replaced a plant in Finland to become SMC’s largest production facility in the world. In addition to local orders, 45 percent of its products will be exported.
The emerging market is currently the sixth-largest arena for Sandvik, with revenues reaching 4.4 billion yuan last year, up 26 percent from a year earlier and up from 1 billion yuan in 2003.
SMC performed even better. Its annual growth rate reached 75 percent in East Asia, and the figure for China is even higher, Antonin Beurrier, president of SMC East Asia, said.
Sandvik has approximately 50,000 employees in 130 countries. It generated global sales of $12 billion and profits of $1.35 billion last year.
With registered capital of 100 million yuan, the company entered China in 1985. Today, Sandvik China has 25 representatives, 10 production sites and 1,800 employees in China. Its sales network covers more than 70 cities.
Competition
Most of Sandvik’s products in China are for local consumers. They are meeting chemical engineering, automobile, space and aerospace, mining and new energy needs in alignment with the country’s 4 trillion yuan stimulus package.
A large number of Sandvik’s products are for infrastructure and construction, the demand for which is booming in China.
The National Bureau of Statistics reported that total investments in fixed assets, including infrastructure and construction, in China amounted to 17.23 trillion yuan last year — up 25.5 percent by 2007.
However, there is also fierce competition as the emerging market becomes more attractive to domestic and foreign counterparts.

Sandvik’s competitors include Sweden-based industrial solution provider Atlas Copco, US high technology tool and steel tooling company Kennametal and Israeli cutting tool giant Iscar.
Lars Pettersson, president and CEO of Sandvik Group, said domestic and foreign competitors in the Chinese market do not discourage Sandvik.
“That’s a good thing. Competition results in improvement and better products and services for customers,” Pettersson said, adding that Sandvik has segmented the market and is niche-oriented.
Lindholm of Sandvik China Holding Co emphasized that Sandvik also has advantages in its safety and environmental protection efforts.
Sandvik’s mining machines, for example, can efficiently reduce mining accidents, since all products can be operated under remote control, Lindholm said. Small-sized machinery can facilitate operations in small mines, he added.
The company also provides training for clients to increase safety and cost-efficiencies. So far, Sandvik has six client training centers in Shanghai, Tianjin, Guangzhou, Xi’an and Beijing. Every year, the centers provide training and services for more than 2,000 clients in China.
A ‘green’ advantage
“We combine high technologies with green concepts to reduce energy consumption and emissions, as well as to increase recycling,” said Beurrier of SMC East Asia.
SMC has introduced large mobile construction rubble recycling machines to China. The machines can treat demolished buildings and urban garbage on site and crush the rubble.
The machines then automatically sort the powder into concrete materials, road building auxiliary materials, brick-making powder and recyclable organic materials.
The machines are fueled by diesel oil and equipped with zero-dust emission technology.
Recycling drilling tools represent another innovative technology introduced by the company, according to Sandvik.
The core technology is a hard alloy developed by the group’s new materials sector. Drilling tools made with this hard alloy can be reclaimed after use. Sandvik then recycles the hard alloy to make new tools.
“We are not eyeing China as a single market. Since many Chinese large enterprises have to go abroad to develop, we would like to cooperate with them to exploit foreign marketplaces,” Beurrier said.
For example, some Chinese clients have contacted Sandvik about running businesses in Australia or Africa.
“We would love to share our experiences and knowledge with our customers in China and to help them to become competitive in the global market,” Beurrier said
Lindhold of Sandvik China Holding Co added that China’s manufacturing industry is evolving from low-end manufacturing to high-end manufacturing, and innovative technology can play a role in this process.
“We can and would like to help with this,” Lindholm said.

CNPC in joint bid for Iraqi oil

CNPC in joint bid for Iraqi oil

The Iraqi government has approved a contract with a British-Chinese consortium to develop a prized oil field in southern Iraq, a significant achievement for a country that has struggled to attract foreign investors despite its vast natural resource wealth.
The deal was the only one to emerge from a disappointing bidding round in June offering development rights for six oil and two gas fields.
It was Iraq’s first such bidding process in more than three decades, but foreign firms felt the prices set by the government were too low given continued violence in the country and disputes over natural resource control.
But things have been looking up in recent days for Iraq’s hope to use increased oil revenue to recover from years of war and sanctions. Earlier in the week, three international consortiums agreed to meet the Iraqi government’s price to develop oil fields in the country.
Even more important is the Iraqi Cabinet’s approval of the bid by Britain’s BP Plc and its Chinese partner CNPC to develop the 17.8 billion barrel Rumaila field near the southern city of Basra. The deal was approved late on Friday, Iraqi government spokesman Ali al-Dabbagh said, without providing further details.
According to the agreement, BP will hold a 38 percent stake in the venture and CNPC will have a 37 percent share. Iraq’s State Oil Marketing Organization will control the rest.
“It is a very important event … very promising for Iraq,” said Samuel Ciszuk, an energy analyst with London-based IHS Global Insight. “The huge incremental this project alone could bring in a relatively short period of time … is very important.”
Iraq has the world’s third-largest known oil reserves, and crude exports are the country’s most important source of revenue. But Iraq’s current daily output of 2.4 million barrels is far below the country’s potential.
Iraq’s oil industry has been hampered by years of wars, sanctions and sabotage attacks by insurgents after the 2003 United States-led invasion.

BHP lobbied to block Chinalcos Rio Tinto bid

BHP lobbied to block Chinalco’s Rio Tinto bid

BHP Billiton Ltd, the world’s biggest mining company, lobbied Australia last year to stop Aluminum Corp of China’s proposed $19.5-billion investment in Rio Tinto Group, the Sydney Morning Herald reported, citing a former government official.
BHP executives, including Chairman Don Argus, met officials including Prime Minister Kevin Rudd and Treasurer Wayne Swan to discuss the proposed investment, the newspaper said. E-mails from BHP were circulated throughout the government, the Herald cited former Treasury official Stephen Joske as saying.

Rio Tinto rejected Chinalco’s proposed deal in June in favor of a share sale and an iron ore joint venture with BHP.
Meanwhile, BHP has agreed to buy United Minerals Corp for $188 million, countering a bid by a Chinese firm to take a stake in the iron ore explorer.
The bid is conditional on China Railway Materials Commercial Corp not completing the purchase of an 11.4-percent stake in United announced last month.

SAIC, GM eye India market

SAIC, GM eye India market

SAIC Motor Corp, China’s biggest automaker, is in talks with its partner General Motors to explore new business opportunities that include India, a source with knowledge of the matter said on Friday.
India’s Economic Times reported that the Shanghai-based automaker was close to taking a stake in General Motors India but did not provide further details.
The source told Reuters that discussions between SAIC and GM were aimed at expanding their ties, including opportunities in India, one of the world’s fastest-growing auto markets.
The US automaker produces Cadillac, Buick and Chevrolet models in Shanghai with SAIC. The partners also manufacture Wuling-brand minivans and pick-up trucks in southern China.
“GM’s discussions with SAIC include business opportunities in India, but no final decision has been made on how they will cooperate,” the source said.
The two carmakers have been in talks about introducing Wuling light commercial vehicles in India, where economic growth is spurring demand for small trucks, GM India’s Managing Director Karl Slym said last month.
“The Indian market has huge potential for cheap, small cars and the market is booming,” said Klaus Paur, North Asia director for market research company TNS. “It would be a good move for GM.”
SAIC and GM both own stakes in SAIC-GM-Wuling Automobile Co, the largest mini-vehicle maker in China.
SAIC said only that it was continuing discussions on further business opportunities with GM, while GM had no comment on the matter.
The GM-SAIC partnership is one of the most successful tie-ups between a foreign and local automaker, helping both to be dominant players in a market where Volkswagen AG, Toyota Motor and Ford Motor are also competing fiercely.
SAIC, the maker of Roewe sedans popular with the young Chinese business elite, forecast a more than 70-percent jump in its net profit in the first nine months, after reporting a 47-percent rise in vehicle sales.
GM sold 55.6 percent more vehicles in China during the period, leading a 34.24-percent gain of the overall market. Its China chief Kevin Wale said this week the Detroit automaker aimed to outpace the growth of the market again in 2010.
Analysts are positive about a further expansion of SAIC and GM’s partnership, especially in fast-growing emerging markets, such as India, where demand may match China, which topped the United States as the world’s largest auto market in January.

“It makes sense for SAIC and GM to forge closer ties and explore new opportunities in other markets,” said Qin Xuwen, an analyst with Orient Securities. “I won’t be surprised if they join hands in India which is only next to China in terms of growth potential.”
“The Indian market has huge potential for cheap, small cars and the market is booming,” said Klaus Paur, North Asia director for market research company TNS. “It would be a good move for GM.”