Exclusive: GM and China’s SAIC to push into Indonesia with no-frills vans

Sat Jan 31, 2015 10:18am EST
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By Norihiko Shirouzu

BEIJING (Reuters) - General Motors (GM.N: Quote) and Chinese partner SAIC Motor Corp (600104.SS: Quote) will soon announce a joint push into Indonesia, using their no-frills Wuling brand to establish a beachhead in Southeast Asia’s biggest market and from there tackle other markets in the region.

They have already made moves to purchase a property in an industrial district on the outskirts of Jakarta, according to two people familiar with the matter, and are expected to detail within days what GM China chief Matt Tsien called an important joint venture in a country of 240 million people.

In a report late Friday, officials from Indonesia's industry ministry told state Antara news agency that GM and SAIC would invest a total of $700 million in Indonesia to set up operations to manufacture and market Wuling vehicles in the country.

GM and SAIC, according to the report, plan to start construction of the Wuling assembly plant in August 2015 with an aim to commence production in 2017. The factory will have capacity to produce 150,000 vehicles a year. The report followed a visit to the ministry on Friday by a delegation of GM and SAIC officials, according to Antara.

A GM spokeswoman in Shanghai said she could not confirm details in the report.

For GM, Indonesia will be its second non-China market in Asia, having already broken into India with SAIC, where they cooperate to market Wuling’s small multi-purpose workhorse vans.

The move points to a thaw in what industry watchers considered a creeping chill in the two companies’ partnership over recent years.

GM said SAIC-GM-Wuling, which also includes Wuling Automobile Co as a stakeholder, will own 80 percent of the new Indonesian venture. SAIC will separately own the rest.   Continued...

A man walks in front of the gate of Shanghai Automotive Industry Corp. in Shanghai November 18, 2010. REUTERS/Aly Song