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Cars maker GM and its partner SAIC announce joint venture

Shanghai OnStar Telematics Co. – a joint company that will bring modern dashboard technology to China – was announced by General Motors Corp. and Chinese partner SAIC Thursday.

The US$46 million joint venture is the first for GM subsidiary OnStar outside North America, the companies said. It will provide vehicle safety, security and telecommunications services in China similar to those available in the U.S. and Canada, GM said.

The services will be made available first in vehicles made by Shanghai GM, a GM joint venture with SAIC, or Shanghai Automotive Industry Corp. They include automatic crash notification, roadside assistance, remote door unlocking, handsfree phone calling, vehicle diagnostics and turn-by-turn navigation, it said.

GM is hoping the technological whistles and bells it will offer through the joint venture beginning in 2009 will give it an edge in China's increasingly competitive market.

"We believe this will bring new growth points for Shanghai GM," Kevin Wale, president of General Motors China Group. "Telematics is a star industry," he told reporters.

"We expect OnStar to have a similar impact in China as in the U.S.," he said.

OnStar and SAIC each own 40 percent of the joint venture, with Shanghai GM, a 50-50 joint venture of GM-SAIC, owning the remaining 20 percent.

Once the OnStar joint venture rolls out its products, Shanghai GM's major vehicles will all be configured to use the hardware and software needed for its services, said Chet Huber, OnStar's president. He said further study was needed to determine if OnStar would be offered as standard or optional equipment.

In North America, OnStar has "basically terminated" arrangements to run its services on non-GM vehicles, Huber said. But the joint venture is leaving open the option to offer OnStar on other brand cars in China.

OnStar, including the first year's subscription fee, is standard on most of GM's 2008 vehicles in North America. After the first year, vehicle owners pay a subscription fee. The company was set up in 1995 and after early efforts to make it a mobile link to the Internet its services now are promoted as a safety measure.

Asked whether the Chinese government, which tends to demand strict regulatory control over technology and telecommunications, would allow OnStar to operate as intended, Wale said he expected no problems.

Although China's own telecommunications and vehicle services infrastructure is still developing, feasibility studies showed that the services the company intends to offer can be made available across all of China, Huber said.

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