GM relocates Asia-Pacific headquarters to China
By Martin Young

BANGKOK - General Motors, the world's largest auto maker, will relocate its Asia-Pacific regional headquarters from Singapore to Shanghai by January next year, GM Chairman and CEO Rick Wagoner announced.

"Establishing our regional headquarters in Shanghai recognizes how important China has become to our plans to expand our global industry leadership," Wagoner said Wednesday. "Having a strong presence in this dynamic and growing market is not an option anymore, it's a necessity."

Wagoner said the move will place GM's regional staff closer to the rest of the company's operations in northeastern Asia, which account for about 85% of GM's business.

Those include GM Daewoo Auto & Technology Co in Korea, and GM's partnerships with Fuji, Isuzu and Suzuki in Japan.

Currently, GM operates six joint ventures in China with its strategic partner Shanghai Automotive Industry Corp. Group (SAIC),including the Shanghai GM Company Ltd and the Pan Asia Technical Automotive Center (PATAC).

GM has the broadest product portfolio and the second largest market share of any global auto maker in the country. On June 7, GM announced that it would make more than US$3 billion in new investments in China over the next three years.

Troy Clarke, president of GM Asia Pacific, noted that China has become and is expected to remain the world's fastest-growing vehicle market for the foreseeable future. "We view long-term success and aggressive expansion in China as a key part of our future growth around the world."

GM Asia Pacific expects to settle on the exact location of its new headquarters by the end of July and complete the move by January. GM has offered to relocate most of its Singapore staff of about 90 employees.

GM will maintain a strong presence in Singapore through GM Overseas Development Co. Singapore, which will continue to direct the sale and service of GM's growing lineup of imported vehicles in Singapore.

GM Asia Pacific, the company's fastest-growing sector, has 22,600 employees in 14 countries from New Zealand in the south, to India in the west and Korean Peninsula in the north. The headquarters team oversees GM's business functions throughout the region including finance, product planning, communications, human resources, purchasing, public policy, legal and information systems and service.

It was also announced on Wednesday that GM and Shanghai Automotive Industry Corporation Group (SAIC) will jointly invest about 2.1 billion yuan (US$250 million) in the next three to four years to upgrade their Shanghai-based Pan Asia Technical Automotive Center (PATAC) joint venture. The new investment will be used to fund the construction of a number of world-class facilities, including the largest professional proving ground in China.

Wagoner said, "PATAC has played a critical role in GM's expansion in China by enabling GM China and our joint ventures to leverage the global resources of the entire GM Group and tailor them to the specific needs of our local customers."

He added, "In order for PATAC to remain successful, it must continue to mature along with the domestic market. The new facilities will help ensure that PATAC remains the country's most advanced automotive engineering and design resource. At the same time, they will support GM and our joint ventures' continued industry leadership in China."

PATAC's proving ground will cover more than seven square kilometers. Working with SAIC and GM's Global Proving Ground and Test Laboratory Council, PATAC is in the final stage of selecting a site.

The facility will be the most comprehensive of its kind in the country, with straightaways, a ride and handling track, a dynamics pad, low-coefficient straightaways and a high-speed bowl and a durability road system. Among similar GM facilities, only the Milford Proving Ground in the US state of Michigan will be equal in functionality.

"The establishment of the proving ground will serve as another milestone for China's automotive industry," said Wagoner. "It will not only satisfy the long-term product development and testing needs of SAIC, GM and our domestic joint ventures, but also greatly enhance PATAC's core strengths."

In the run-up to Auto China 2004, on June 7, GM and SAIC announced that PATAC would build several new facilities including the most advanced prototype laboratory in China; a virtual reality design studio that will be the first of its kind in China; a noise, vibration and harshness test lab; and a kinematics and compliance (K&C) lab. The new facilities are expected to be completed within two years.

The new investment projects will be funded by earnings from GM and SAIC's joint ventures in China.

PATAC, which opened in 1997, was the first Sino-foreign automotive engineering and design joint venture. Both GM and SAIC have 50 per cent equity stakes.

PATAC offers a range of automotive engineering, design and testing services. These include designing future-generation vehicles and components; providing complete engineering services for all types of motor vehicles; testing, tuning and validating vehicle systems, engines, chassis, transmissions, emission systems and whole vehicles; and engineering vehicle exteriors and interiors.

With the support of GM and SAIC, PATAC is cultivating China's next generation of automotive engineering and design professionals. PATAC's workforce is expected to grow from over 670 at present to 900 by 2005 and 1,200 by 2010. PATAC also will continue to bring in experts from abroad to keep employees abreast of the latest industry concepts and processes.

"From day one, GM has been focused on contributing to the complete and healthy long-term growth of China's automotive industry," said Wagoner. "As an indispensable pillar of our strategic partnership with SAIC, PATAC serves as an example of the successful cooperation between our two companies. PATAC will remain a key to GM's success in the high-growth China market and an important component of GM's global engineering and design network."

General Motors, the world's largest vehicle manufacturer, designs, builds and markets cars and trucks worldwide, and has been the global automotive sales leader since 1931. GM employs 325,000 people around the world, including more than 11,000 in China. GM today has manufacturing operations in 32 countries and its vehicles are sold in 192 countries.

Insiders pointed out, in tandem with the fast growth in China's vehicle market and the huge growth potential of the market, competitions between multinational corporations for the China market is close to a boiling point, and they have expanded their presence from auto manufacturing to designing and development, professional fostering, sales and service and auto-related financial services in China.

Recently, Volkswagen of Germany announced to make an extra investment of 6 billion euros (US$7.25 million) in China and plans to raise auto production in China to 1.6 million annually.

GM also has announced it would raise its auto production in China to 1.3 million annually.

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