Shanghai, May 4: US President Bill Clinton is expected to visit the upcoming manufacturing site of American General Motors (GM) in Shanghai during his maiden state visit to the country next month."We are building a 1.5 billion US dollars facility that will be the largest and most innovative automobile complex in China," senior company officials told newsmen here.
GM, the world's largest manufacturer of automobiles has signed up a 50:50 joint venture with Shanghai Automotive Industry Corporation (SAIC) to make two models of `Buick' mid-size luxury sedans in China.
"The vehicles will feature 2.98-litre V-6 engines and automatic transmissions, both to be manufactured in china for the first time," Hu Mao Yuan, Shanghai GM president said.
"They have been designed to compete with luxury imports and intended to be sold in China and other Asian markets," said Phil Murtaugh, Shanghai GM executive vice-president.
Construction of the state-of-the-art plant began on June last year and by this augustinstallation of machinery and equipment will be completed.By november this year construction and installation of equipment in all five shops will be completed and production will begin, the officials said.
"On December 1, 1998, the first Shanghai GM automobile will officially roll off the line and by April 12, 1999, regular production will start," Murtaugh said.
Shanghai GM will manufacture 100,000 vehicles, 180,000 engines and 100,000 transmissions per annum.
Officials said the plant will use lean production principles and the just-in-time lean production concept. "We will depend heavily on local suppliers to deliver materials as they are needed, which is more efficient than storing large numbers of parts and materials on site," they said.
"Local sourcing will be our priority," Murtaugh said, adding that the facility will begin with a local content level of 40 per cent.
Stating that finding ideal partners for making autoparts in China was the `biggest challenge,' he said the local content figurewill gradually increase as new suppliers are found or established within China.
Murtaugh expressed optimism over the Chinese luxury car market saying as per official figures, this segment amounted to some 30,000 units per annum.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
