General Motors will develop electric cars in China image

SAIC and General Motors Co Chairman and CEO Dan Akerson signed an agreement today in Shanghai for the co-development of a new electric vehicle architecture in China.

“Our agreement will enable SAIC and GM to take advantage of economies of scale and get new technology to the market faster than by going alone,” SAIC Motor President Chen Hong said in a statement.

A far-reaching partnership with SAIC is a central part of GM’s strategy to manage business in China, where conditions are increasingly challenging as global auto makers and local manufacturers jostle for market share and must contend with government regulation.

Investments and other details of the plan were not provided, and it was unclear if the agreement would help resolve pressures on GM to share technology for the Chevrolet Volt — part of a renewed push by China to acquire advanced know-how its own automakers still lack.

GM is due to launch sales of the Volt in China later this year. But its market prospects are clouded by the possibility Beijing may withhold hefty new energy vehicle subsidies unless GM satisfies those demands.

The issue has raised complaints from U.S. lawmakers who contend such requirements are unfair and may violate world trade rules.

In China, GM is working keep its No. 1 spot by launching more than 60 new or upgraded models by 2015 as part of a plan to more than double sales to 5 million by then.

“The management team has demonstrated an ability to hold onto market share despite being everyone’s target,” Mr. Johnson of Barclays said. “If you ask any local competitor and ask them where they are going to get share from: the answer is GM.”