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SAIC to rev up S. Korean JV
Last Updated(Beijing Time):2006-12-19 15:31
Shanghai Automotive Industrial Corp is restarting its plans to set up a joint venture with Ssangyong Motor Corp in China to accelerate the South Korean car maker's expansion in the local market.

"The program is again under feasibility study, but shareholdings and total investments have not been decided," a company source told Shanghai Daily.

The communications department at SAIC, the nation's biggest car maker, confirmed the development yesterday.

SAIC, which spent US$500 million for a 51 percent stake in Ssangyong, planned to set up a joint venture in Shanghai to make sport utility vehicles, including the Kyron model, with an annual capacity of 100,000 units. The deal was to be part of the company's US$1 billion investment in the South Korean car maker by 2010.

But the plan was suspended after concerns arose from the South Korea car maker's labor union that the Chinese operation would lead to the loss of technology and job cuts in the home market.

"Moving to China doesn't mean we plan to close factories in South Korea, and the cooperation would benefit both parties in technology as well as products," SAIC said.

The introduction of Ssangyong's SUV models would help SAIC expand product portfolio.The company mainly produces cars in cooperation with Volkswagen AG and General Motors.
Source:Shanghai Daily 
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