BEIJING (Reuters) – General Motors and Chinese partner SAIC Motor Corp will soon announce a joint push into Indonesia, using their no-frills Wuling brand to establish a beachhead in Southeast Asia’s biggest market and from there tackle other markets in the region.
They have already made moves to purchase a property in an industrial district on the outskirts of Jakarta, according to two people familiar with the matter, and are expected to detail within days what GM China chief Matt Tsien called an important joint venture in a country of 240 million people.
For GM, Indonesia will be its second non-China market in Asia, having already broken into India with SAIC, where they cooperate to market Wuling’s small multi-purpose vans.
The move points to a thaw in what industry watchers considered a creeping chill in the two companies’ partnership over recent years.
GM said SAIC-GM-Wuling, which also includes Wuling Automobile Co as a stakeholder, will own 80 per cent of the new Indonesian venture. SAIC will separately own the rest.
GM owns 44 per cent of SAIC-GM-Wuling, SAIC owns 51.1 per cent, and Wuling owns 5.9 per cent, so GM’s stake in the Indonesian venture will effectively be 35 per cent.
The venture will manufacture and market low-cost “people mover” microvans, based on the same vehicles that in China, under the Wuling brand, can sell for just under 30,000 yuan ($4,800).
GM already operates a sales and manufacturing company in Indonesia with a range of Chevrolet vehicles that includes a strategic compact people mover of its own, the Chevy Spin.
Tsien said GM and SAIC saw the two brands as complementary, rather than rivals, as they will be differentiated by pricing, product quality and features.
Wuling’s focus is “great functionality, attractive styling and value for money”, Tsien said. “That’s the basic element that really works here in China, and we believe under SGMW’s leadership this will be quite successful in Indonesia as well.”
The GM China chief said Indonesia had a large and growing appetite for simple multi-purpose vans, often with three rows of seating that can accommodate seven or eight people.
He declined to say exactly what type of microvans they are planning for Indonesia or how they would market or price them.
Officials from Indonesia’s industry ministry told state news agency Antara late on Friday that GM and SAIC would invest $700 million, with an aim to commence production in 2017 from a factory with capacity for 150,000 vehicles a year.