BEIJING - General Motors is involved in the purchase of another Chinese assembly plant, bringing its total to five.
GM has acquired a plant owned by Yizhong Qingdao Automotive Technology Manufacturing Co., say industry sources and sources in Yizhong's finance department.
But it is not clear whether GM is making the purchase on its own or through its partnership with Shanghai Automotive Industry Corp.
The assembly plant is in the northern coastal city of Qingdao. It will assemble minibuses from kits shipped from SAIC GM Wuling Automobile Co., a joint venture in southwest China, the sources say.
Last year Wuling sold 235,188 minibuses, up 30.5 percent compared with 2003.
The Qingdao plant was producing several thousand outdated sedans a year.
Production has ceased pending the new management's arrival, say sources in Yizhong's finance department.
The acquisition suggests GM is sticking with its aggressive expansion plans in China. Under Phil Murtaugh, the recently departed president of GM China, the automaker had become China's second-largest automaker.
GM spokeswoman Daphne Zheng would not confirm that GM had purchased Yizhong. "Discussion has been going on to explore opportunities to further grow GM and our partner's business in China," she said.
Other GM sources say a signing ceremony is planned for June 1.
GM did not buy all of Yizhong's assets, says a manager in Yizhong's finance department.
"They only bought the useful assets - like the production line," the source said. The price was not disclosed.
Yizhong was established in 1997 by the Yizhong Tobacco Group, which hoped to get a piece of China's nascent car market. But its sedans were outdated - "like a 1970s model," says Yale Zhang, chief of the Shanghai office for CSM Corp., an automotive market research firm.
The Chinese government did not allow Yizhong to sell the cars nationwide, and the company has languished.
Rather than building plants, GM has expanded in China mainly through acquisitions. It is part owner - along with Shanghai Automotive - of four other assembly plants with a combined production capacity of 530,000 units:
GM and Shanghai Automotive are partners in the Pan Asia Technical Automotive Center, an engineering and design center in Shanghai; and in GMAC-SAIC Automotive Finance Co.
GM also is shopping for plants to build commercial vehicles. According to industry sources, GM is considering Hefei Jianghuai Automobile Manufacturing Co., which builds buses, trucks and chassis in Anhui province in central China.
Last year Hefei Jianghuai assembled more than 130,000 vehicles, mainly light commercial vehicles and medium-duty trucks.