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General Motors and China’s SAIC Motor Corp will announce a tie-up today to expand into the Indian market, marking a significant step in China’s efforts to gain a foothold in one of the world’s largest emerging markets for cars.

GM and SAIC – which are already in a joint venture in China – are expected to say they plan to sell some of the Chinese producer’s light commercial vehicles in India, including minivans and mini-trucks, a segment dominated by domestic market leader Tata Motors.

GM already produces vehicles in India and its sales there rose 65 per cent in November over the same period a year earlier to 7,118 units.

“SAIC is looking for a greater role in the global markets and GM wants to enhance its portfolio by offering vehicles that are coming from a more cost- effective platform,” said Mohit Arora, JD Power Asia-Pacific senior director.

Trading of SAIC shares in Shanghai was suspended yesterday after the company said in a statement to the Shanghai stock exchange that it planned a “major asset restructuring” and would hold a board meeting before December 9 to discuss the move.

The announcement led to speculation that SAIC was planning to take majority control of its 50-50 joint venture with GM – which has had a record year in China – although analysts questioned why the US carmaker would agree to this.

GM has sold more than 1.6m cars in China through its joint ventures so far this year, a 64 per cent increase over the same period in 2008. November GM sales were up 109 per cent over the year earlier period.

India’s car market has roared back to life in recent months on the back of annualised gross domestic product growth of 7.9 per cent in the three months ended September.

GM India declined to comment on SAIC yesterday.

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