General Motors has been cleared by the Chinese government to build a new $1.1 billion auto plant in the country’s central city of Wuhan with joint-venture partner SAIC Motor Corp. GM is already the largest foreign automaker in China, with the approval likely to keep the Detroit automaker on top for years to come.
GM says it still hasn’t decided if it will move forward with the construction of the factory, but industry experts expect the company will approve the measure in the coming weeks. The new plant will have an annual capacity of 300,000 units, raising GM’s total China capacity by 15 percent.
“GM has been running with tight capacity and the expansion will make the company even more competitive,†Cao He, an analyst with China Minzu Securities Co. in Beijing, told Bloomberg. “To have a foothold in central China will also bring GM closer to its clients there and lower logistic costs.â€
GM’s 2.55 million sales in China last year helped the company dethrone Toyota as the world’s largest automaker.
