GM China joint venture to boost capacity 50 percent by 2012

SHANGHAI: General Motors' main Chinese commercial vehicle joint venture said Monday it would raise its production capacity by nearly 50 percent to 1.31 million units by the second half of 2012.

SAIC-GM-Wuling - a joint venture between GM, Liuzhou Wuling Automobile and China's largest auto maker, SAIC- said it was expanding capacity at its plant in Liuzhou in southern China to 800,000 units a year from 590,000 at present.

It is also expanding capacity at its plant in Qingdao in eastern China to 510,000 units from 300,000, the company said in a statement.

The company said it would launch a new passenger vehicle brand including a mid-size sedan later this year, and the additional factory lines would ensure it had sufficient production facilities.

China, the biggest auto market in the world, has proved a major boost for foreign carmakers as sales in developed countries slumped following the global financial crisis.

The Chevrolet Spark, a small hatchback, is currently the only passenger vehicle made by SAIC-GM-Wuling, which now focuses on Wuling-branded vans and pick-up trucks.

The nation's auto sales hit 13.64 million units in 2009, overtaking the United States as the world's number one auto market, as Beijing offered incentives such as tax breaks and subsidies for fuel-efficient vehicles.

Sales at SAIC-GM-Wuling were up 18.9 percent in April compared to a year earlier at 113,633 vehicles. The company aims to sell 1.23 million vehicles in China in 2010, up 16 percent from last year.