GM, SAIC to Pursue Joint Development of Clean Vehicles in China

SHANGHAI, China - General Motors Corp. and Shanghai Automotive Industry Corp. Group signed an agreement today to jointly pursue the development and commercialization of hybrid and fuel-cell vehicles in China. The agreement is the first of its kind between a global and Chinese automaker.

During the signing ceremony, GM Chairman and CEO Rick Wagoner and SAIC Chairman Chen Xianglin announced the partners will co-develop a demonstration vehicle using the latest fuel-cell technology, building on GM's HydroGen3 fuel-cell vehicle. The two-year demonstration, which will begin in Shanghai early next year, is designed to showcase the benefits of fuel-cell vehicles in real-life applications.

The agreement reinforces the two partners' strong commitment to provide solutions to address concerns over energy security and to reduce the environmental impact of China's growing number of motor vehicles. GM China Group Chairman and CEO Phil Murtaugh and SAIC President Hu Maoyuan signed the agreement in the presence of Wagoner and Shanghai Vice Mayor Hu Yanzhao.

"The agreement represents another dimension in the developing partnership between GM and SAIC," Wagoner said. "It will help stake out a leadership position for GM and SAIC in the development of energy-efficient and environmentally clean vehicles in China. This is in support of the long-term strategic plan of the Chinese government to promote a sustainable automotive industry."

The partners intend to:

"The realization of a cleaner future will not be accomplished in a single step," Wagoner said. "That is why GM is adopting a three-pronged approach to our overall advanced propulsion strategy, which we believe offers the greatest overall benefits to society. Hybrids will play an important role, but over the long term, we believe fuel cells powered by hydrogen offer the ultimate environmental answer. Because it has a developing automotive industry without a massive gasoline infrastructure, China is in a unique position to take the lead in moving toward a hydrogen-based economy."

As part of the agreement, GM and SAIC have agreed to carry out a series of joint programs.

On Oct. 11, the two companies announced their first hybrid bus program for the China market. The program represents the initial stage of the implementation of the agreement signed today. The unique vehicle will feature a hybrid system developed by GM's Allison Transmission, and a bus from a SAIC joint venture. It will provide valuable information that the partners can use to study the feasibility of mass-producing the bus.

GM's Pan Asia Technical Automotive Center will be responsible for maintaining the daily operation of the demonstration fuel-cell vehicle. This will enable PATAC to become familiar with the latest alternative propulsion technology in order to enhance its own product development capability. It will further serve as an important point of reference for government decision-makers in creating regulations and standards and developing infrastructure required for the next generation of vehicles.

In addition, GM will leverage its industry-leading fuel-cell technology to fully support SAIC's bid in the fourth quarter of 2005 to take part in the Global Environment Facility/United Nations Development Program Demonstration for Fuel Cell Bus Commercialization program in China.

"With the strong support of the Shanghai and central governments, we are confident the great potential for commercial clean-energy vehicles in China will be realized," Hu Maoyuan said. "SAIC is already actively participating in clean-vehicle development programs funded by the Chinese government. SAIC recognizes GM's global leadership position in advanced technology. We believe that combining the individual strengths of our two companies will speed up the march toward a cleaner and sustainable future in China.''

This isn't the first time GM and SAIC have partnered in fuel-cell technology. The partners were the first to demonstrate fuel-cell technology when they unveiled a fuel-cell Buick GL8 minivan, called the Phoenix, in November 2001. The Phoenix was powered by a 35-kilowatt, first-generation, fuel cell stack from GM. The newer HydroGen3 is about twice as powerful and much more refined.

"There are many challenges to creating a hydrogen-based economy," Wagoner said. "Overcoming the challenges requires the joint effort of automakers, suppliers, energy companies, academic institutions and government organizations. The signing of today's agreement and launch of actual advanced technology vehicle programs is part of our goal of helping develop the next generation of vehicles for China in China. We believe that through partnerships, China can create a sustainable automotive industry."

SAIC is one of China's largest vehicle manufacturers. Last year it sold more than 782,000 vehicles and had revenue of nearly RMB 187 billion. It is a partner with GM in Shanghai GM and PATAC, and with GM China in SAIC-GM-Wuling, Shanghai GM Dong Yue Motors, Shanghai GM Dong Yue Automotive Powertrain and Shanghai GM (Shenyang) Norsom Motors. In addition, SAIC subsidiary Shanghai Automotive Group Finance Co. (SAICFC) is a partner with General Motors Acceptance Corp. (GMAC) in GMAC-SAIC Automotive Finance Co.

General Motors Corp. (NYSE: GM), the world's largest vehicle manufacturer, employs about 325,000 people globally. Founded in 1908, GM has been the global automotive sales leader since 1931. It operates seven joint ventures and two wholly owned foreign enterprises in China. GM today has manufacturing operations in 32 countries and its vehicles are sold in 192 countries. In 2003, GM sold nearly 8.6 million cars and trucks, about 15 percent of the global vehicle market. GM's global headquarters are at the GM Renaissance Center in Detroit. More information on GM and its products can be found on the company's corporate website at www.gm.com .