GM opens new plant for Chinese budget-brand Baojun

[November 19, 2012]  HONG KONG (AP) -- General Motors Co. and its local Chinese partners have launched a second plant to make cars for its local discount brand Baojun, ratcheting up the battle for customers at the fast-growing lower end of the world's biggest auto market.

The SAIC-GM-Wuling joint venture opened the factory on Sunday in southwestern Guangxi province. GM and its partners have invested 8 billion yuan ($1.3 billion) in the facility, which will be capable of turning out up to 400,000 vehicles a year.

The joint venture is also building a powertrain factory at the plant that will be able to produce up to 400,000 engines annually. It's scheduled to open in September 2013.

The first car to roll off the plant's production line was a Baojun 630 midsize sedan, one of two cars sold under the only-in-China badge. The 630 sells for about 63,000 yuan ($10,100) while the Le Chi mini car goes for about 40,000 yuan ($6,400).

China surpassed the United States as the world's biggest auto market by vehicles sold in 2009 but slowing sales growth has prompted global automakers to look for new ways to tap the faster-growing low end of the Chinese market in smaller cities and the countryside.

In September, Nissan unveiled the second model from its new low-priced Chinese brand Venucia, a compact hatchback that will sell for as little as 67,800 yuan ($10,760). Honda has also launched a budget brand, Li Nian.

The SAIC-GM-Wuling is focused on making mini-trucks and microvans.

[Associated Press; By KELVIN CHAN]

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