In its darkest hour, GM handed China-partner SAIC half of GM’s India business in return for some cash. Recently, GM injected cash (which it has again) into the joint venture, which resulted in GM owning 91 percent of the India business, and SAIC nine. That was widely lauded as GM regaining its independence. Some even said GM and SAIC don’t get along anymore. The opposite is true: GM and SAIC are expected to march hand in hand all over Southeast Asia. SAIC’s influence on GM is spreading.
GM China chief Bob Socia told Reuters that SAIC “will continue to help GM develop ‘value cars’ for India and other emerging markets” and that GM and SAIC might combine their respective strengths to crack emerging market demand for no-frills cars in all of Southeast Asia.
“The whole ASEAN arena is ripe for that same sort of conversation,” Socia said.
“I wouldn’t read too much into the equity share thing; we’re working very well and we will continue to work very well with one another,” said Socia. While GM has resumed operative control of India, SAIC still is “very active in strategic issues of the organization.”
Apart from China and India, Southeast Asia is one of the markets with the most future. It is also where GM had a hard time. Japanese brands own most of Southeast Asia. In Indonesia, Japanese brands control well over 90 percent of the market. GM wants to go on the counter-offensive with low cost cars out of the SAIC stable.
GM is the first and so far only car company that unites with a Chinese joint venture partner to develop other growth markets. A Chinese joint venture slowly develops into a worldwide partnership.