GM to Open Third Manufacturing Base in China

General Motors plans to open a new assembly plant in China with its local partners at an initial cost of RMB6.6 billion ($1.2 billion), hoping to move the Detroit auto maker’s output in the emerging country closer to demand levels.

It would mark the third manufacturing base for the joint venture in the well-developed Chongqing Municipality of midwestern China between GM China, Shanghai Auto and Wuling Motors. The new facility awaits government approval.

GM says the manufacturing operation will have the capacity to produce 400,000 vehicles and engines annually. Product details will be announced later. However, the SGMW JV so far has focused on commercial mini-vehicles and currently holds the No.1 position in the segment.

The new facility, scheduled to open in 2015, should move GM’s output in the region closer to the auto maker’s projected demand levels.

Although the emerging market’s appetite for automobiles has cooled somewhat recently after several years of rapid growth, Tim Lee, head of GM International Operations in Shanghai, recently told WardsAuto the auto maker considered itself about one assembly plant behind growth levels.

“It’s an incredibly interesting country, and it is growing,” Lee said earlier this year, blaming the market’s moderation on Europe’s economic crisis. “The trends are pretty predictable.”

GM says the facility, which will incorporate the auto maker’s global manufacturing processes and standards, gives the JV a strategic position in southern, northern and midwestern China and should help SGMW achieve it production target of 2 million vehicles annually by 2015.

SGMW also operates manufacturing facilities in Liuzhou, Guangxi Zhuang Autonomous Region and Qingdao, Shandong.

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