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GM To Ship $200M in Parts to China

October 22, 1997

DETROIT (AP) _ General Motors Corp. received permission to ship $200 million in parts to China _ enough to build 18,000 Buicks in that Asian country in 1999.

The Buicks will be the first passenger cars made by the No. 1 automaker in the world’s most populous country.

GM said Wednesday the agreement is significant because of the potential for growth in the Chinese auto market. The automaker predicts China’s market in 25 years will rival the 15 million new vehicles sold each year in the United States.

``We are very confident that we will have the market needs for our product,″ Hu Mao Yuan, president of Shanghai GM, said through an interpreter.

The parts, all North American made, will be shipped next year and in 1999.

Chinese import rules normally require that at least 40 percent of the auto parts come from China, the company said. The agreement initially waives the rules so Shanghai GM can start production in 1999.

``We want to make sure we get vehicles out at the time we said we’re going to do it,″ said Rudy Schlais, president of GM-China.

Shanghai GM plans to get 40 percent of its parts from China starting in 1999 and hopes to eventually reach 100 percent, Hu said.

The $200 million in parts are part of the $1.6 billion in North American exports that the automaker has said would result from its joint venture with Shanghai Automotive Industry Corp.

The $1.5 billion joint venture will result in the production of 18,000 Buicks in 1999, 50,000 in 2000 and 100,000 by 2001, Hu said.

The mid-luxury Buick models will be similar to the Regal and Century, but have not yet been named or priced. They are intended for government officials and prosperous business executives.

GM also has a truck-assembly joint venture that is under construction in the northern Chinese city of Shenyang. The automaker also is competing to take part in a joint venture with the Chinese government to build small cars in China.

Update hourly