GM will spread the investment across existing joint-venture operations in a bid to more than double car production in the country. By 2007, it wants to make 1.3 million cars a year in China. As part of the expansion, it has announced the construction of what it describes as world-class engineering and design facilities in China.

“GM remains highly confident in the long-term prospect of the China market. Success in China is crucial to GM’s global success,” says Phil Murtaugh, chairman and CEO of GM China. To date, the company has invested about $1.6bn in China. Last year it made a $437m profit in the country, 300% more than in the previous year. According to GM, China could be the world’s second biggest market within two years, overtaking Japan to rank behind the US.

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GM is not the only carmaker set on winning Chinese market share. Between them, GM, Ford Motor Co, Volkswagen and Toyota Motor Corp have committed more than $10bn in the past 12 months. In the past two decades, foreign car companies have invested about $30bn in China.

GM wants to more than double production at its Shanghai plant with its joint venture partner Shanghai Automotive Industry Corp. It also plans to increase production capacity at the former Jinbei General Motors Automotive Company plant in Shenyang, Liaoning, following a reorganisation of another joint venture with Shanghai Automotive. Production at GM’s venture with Wuling Automotive and Shanghai Automotive will also be increased, boosting production capacity from 2006. GM is also planning to set up a design and testing centre in Shanghai.