The Chinese hand that helped save GM

Two and a half years ago General Motors, one of the world's biggest automakers, was in crisis - it filed for Chapter 11 bankruptcy protection in the US after sales slumped in Europe.

In the first six months of this year the company's prospects were looking so rosy that it had regained its crown as the world's biggest automaker.

Liuzhou, a small city in China that few people outside the country would have heard of, has had a leading role in helping the company find its feet again.

The city, in the Guangxi Zhuang autonomous region, is the location for SAIC-GM-Wuling, a three-way joint venture that was set up in 2002, a year after China joined the WTO. It contributed more than half of GM's total sales in 2009, the year the US conglomerate restructured its operations.

That year was also a watershed in Chinese vehicle manufacturing, because SAIC-GM-Wuling sold 1.06 million units, becoming the first automaker in China to have annual sales of more than 1 million units.

The trend was given a fillip by the Chinese government's stimulus and subsidies for vehicle purchases and trade-ins.

The company also retained its edge in China's minivan sector for the fourth consecutive year with its Wuling minivans, and boosted its market share to 47 percent from 11 percent earlier.

As a result of the Wuling success, managers of the revitalized GM decided to look for further expansion in emerging markets.

In August 2009 GM began exporting locally produced Wuling-brand mini-commercial vehicles under its international Chevrolet badge through GM's distribution networks, to markets in South America, the Middle East and North Africa.

GM also signed an agreement with its Chinese partner SAIC Group to pool resources to promote expansion in other Asian markets such as India, the SAIC-GM-Wuling venture being central to the strategy.

GM and SAIC would use GM's two vehicle making plants, a power train facility in India and GM's nationwide distribution network.

Mini-commercial vehicles from the SAIC-GM-Wuling stable would be produced and sold in India and the products would be part of GM's global vehicle fleet. Analysts say GM has found a way to use its SAIC-GM-Wuling business model in more emerging markets.

In August this year SAIC-GM-Wuling launched its first passenger car, the Baojun 630, making the self-developed Baojun brand join GM's other three brands in China, Buick, Chevrolet and Cadillac. The car is initially targeted at consumers in China's second- and third-tier cities, but GM is considering making it in India.

"Over the last 15 years GM has focused on growing all its areas of business in China - from brands to product lineup to new business opportunities - both on its own and with partners," said Kevin Wale, president and managing director of General Motors China.

"GM's success in China is the result of our strategic approach to doing business in this country. China will continue to be a top priority for the company in the future also," said Dan Akerson, the automaker's global chairman.