General Motors China, a unit of automaker General Motors Co. (GMGMQ.PK, MTLQQ.PK) and China FAW Group Corp. on Sunday jointly announced the establishment of a 50-50 joint venture FAW-GM Light Duty Commercial Vehicle Co., Ltd. The venture is focused on the production and sale of light-duty trucks and vans. It also will engage in R&D, exports and aftersales support, the companies said. The joint venture has registered capital of RMB 1.2 billion and total investment of RMB 2 billion.
The two companies began official discussions on cooperation in the development and production of light commercial vehicles in January 2007, following which a memorandum of understanding was signed. In December 2008, the two parties signed a joint venture contract and in July this year, the joint venture received approval from China's central government and related registration processes were completed.
The new joint venture includes Harbin Light Vehicle Co., Ltd., and FAW's share in Hongta Yunnan Automobile Manufacturing Co., Ltd. Existing and future products will be branded FAW in China, while the joint venture leaves room for the creation of GM derivatives, the companies added.
According to Xu Jianyi, President of FAW, ''The new joint venture will benefit by leveraging both partners' resources in product development, research and marketing to help satisfy increasing domestic and global demand for light commercial vehicles.''
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