UPDATE 1-GM to set up $250 mln research centre in China


(Adds details, background)

BEIJING, Oct 29 (Reuters) - General Motors Corp , one of the world's top two automakers, will set up a $250 million scientific research centre in Shanghai, Chief Executive Rick Wagoner said on Monday.

It joins a long list of multinational companies that are conducting research in China to tap the country's growing scientific expertise, develop products for the huge local market and gain credit in the eyes of a government determined to climb the technology ladder.

GM makes cars in China with the mainland's biggest car maker, Shanghai Automotive Co Ltd .

"The centre will carry out advanced research projects in partnership with the Chinese government, local industry partners and academic institutions," Wagoner told reporters.

Construction of the first phase of the GM Centre for Advanced Science and Research will be completed next year, he said.

In addition to the new science centre, GM said on Oct. 12 that Shanghai General Motors, its venture with SAIC, would spend 1.6 billion yuan ($213 million) on a 5.6 square kilometre (2.16 sq mile) testing ground, China's biggest, in the eastern province of Anhui.

China has been a bright spot for GM as it battles stiff competition in its home market and implements a sweeping restructuring plan that involves cutting more than 34,000 jobs and closing 12 plants in North America. The company has lost more than $12 billion in the past two years.

Last year the car maker sold 876,747 vehicles in China, the world's second-largest market, and expects sales to exceed 1 million this year.

Detroit-based GM competes with Toyota Motor Corp , Volkswagen AG and other global rivals in China, where vehicle output has grown rapidly at an average 26 percent a year from 2001.

GM's global sales rose to a record 2.38 million vehicles in the third quarter of 2007, but sales in North America, which accounts for 44 percent of sales and is its largest market, fell 6 percent. (US$=7.4750 yuan)



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