GM SIGNS $30 MILLION AGREEMENT TO MAKE LIGHT TRUCKS IN CHINA

GM SIGNS $30 MILLION AGREEMENT TO MAKE LIGHT TRUCKS IN CHINA

Cash-strapped General Motors Corp. signed Wednesday its long-awaited deal to make light trucks in China, committing itself to a minimum US$30 million investment.

It will take 30 percent of the US$100 million joint venture with Jinbei Auto Co. of Shenyang, capital of northeastern Liaoning province.As reported previously in The Journal of Commerce, it is GM's first such endeavor in China. It joins Chrysler Corp., which makes Jeeps in Beijing; Germany's Volkswagen AG (sedans), Daimler-Benz (trucks) and France's Peugeot SA (cars) and its Citroen SA unit (cars and pickups).

Jinbei GM Automotive Co., the new entity, will employ about 5,000 workers, Chinese officials said. It will produce what GM calls its S-class one-ton pickup, with forecast output of 50,000 a year by 1998.

The Chinese company - known in English as Gold Cup - produces 35,000 minibuses and 20,000 trucks a year now from kits supplied by Japan's Toyota Motor Corp. and Mitsubishi Motors Corp. respectively. It also operates 48 components factories in the Shenyang area.

Talks on the deal have been protracted, partly because the Chinese were pressing for production of components to be included. Ronald J. Gilchrist, executive vice president of the regional office of General Motors Overseas Corp., insisted that could happen only as part of a truck-assembly deal.

Mr. Gilchrist is in Beijing and unavailable for further comment.

The Chinese quoted Thomas McDaniel, GM's vice president for Asia- Pacific operations, as saying the company expects "China's vehicle market to follow a pattern of steady growth."

''We are discussing the possibility of expanding on S-class production or adding the Blazer," the four-wheel drive Chevrolet.

The joint venture's output will be mainly for domestic use, beginning in 1996.

In the first year, China agreed to production of 2,000 units from kits imported from North America, Mr. McDaniel said.

China said last month it hoped to maintain steady growth in light trucks over the next couple of years to perhaps 400,000 against the current 200,000.