General Motors has signed a two-year agreement worth $900m with its SAIC joint venture in China, Shanghai GM, for the export from the US of Cadillac, Buick and Chevrolet vehicles and components. Vehicle shipments are expected to account for $500m while the component exports are valued at $400m.
The deal forms part of a wider series of trade and investment agreements between the US and China signed during the official four-day visit of China’s president Hu Jintao to the US last week.
GM and its joint ventures in China accounted for total sales of 2,351,610 vehicles there last year, an increase of 28.8% compared with sales in 2009. This compares with an increase of 6.3% in the US and means the company now sells more vehicles in China than it does at home.
The company said it was not producing any further detail regarding the logistics structure being put in place to support the exports, stating only that it had “been selling vehicles and components to SAIC for some time, thus the logistics and logistics support are well established”.
Back in 2008 GM announced plans to sell and export $1 billion worth of vehicles, component kits, machinery and equipment to Shanghai General Motors, through to 2010.
Recently the China Automobile Trading Company, reported that 2010 saw an 84% increase in imported vehicles on 2009, with a total of 650,000 foreign cars sold and half of those being sales of SUVs. GM is out in front of the pack but US rival Ford has recently announced that it has entered negotiations with China’s Ministry of Commerce to reduce import costs for its products.