SHANGHAI -- General Motors said on Tuesday it has called off talks with shareholders and creditors of a Chinese engine venture set up by South Korea's Daewoo Motor Co., which Daewoo said GM had wanted to buy.
Daewoo said in March that GM was set to buy the $228 million plant in Yantai in Shandong province, capable of producing 240,000 engines and transmissions a year, from its creditors.
Officials at the South Korean conglomerate had said talks hinged on a price for the Chinese engine venture, which GM said the ailing Asian automaker wanted to sell.
GM and partners took a majority stake in Daewoo Motor last year for $251 million, creating GM Daewoo Automotive and Technology Co. Daewoo Motor is now in the process of liquidating assets not covered by that acquisition.
"We have been approached by shareholders of the engine plant," said Daphne Zheng, GM's spokeswoman in China. "I can confirm the discussions have been ended."
But executives at GM, the world's top automaker, declined to confirm the specific nature of the talks.
The collapse of talks over the engine plant are not expected to dent GM's prospects in China, where analysts see two million cars being sold this year.
The U.S auto giant has managed to claw some market share from rivals like Volkswagen AG, the country's pre-eminent automaker with a commanding 40 percent share of nationwide sales. GM now has about eight percent of the market.
Daewoo's Chinese engine plant was set up in 1999 with the Shandong government and Daewoo holding 50 percent each.
Last year, GM agreed to invest 900 million yuan ($109 million) in another auto plant in Yantai, the U.S. auto giant's fourth in the world's fastest growing car market.
GM took 25 percent of Yantai Bodyshop Corp, longtime Chinese partner Shanghai Automotive Industry (Group) Corp. took 25 percent and their 50-50 joint venture -- Shanghai GM -- the remainder.
Production of its Sail family car had already been shifted to the Yantai plant, renamed Shanghai GM Dongyue Motors Co Ltd, which has an annual capacity of 100,000 units.