In a bid to put the brakes on growing market competition, Shanghai General Motors (SGM) will soon launch an over 2 billion yuan (US$240 million) project to substantially raise its output capacity.

Through the construction of new production facilities, the project will enable the company, one of China's top three Sino-foreign auto joint ventures, to add more than 100,000 units in its annual vehicle production capacity, according to Xiong Chuanlin, senior SGM official.

"Our further target is to ensure a 400,000-unit annual yield capacity by 2007,'' Xiong told China Daily.

That means SGM, a US$1.5 billion joint venture between the US auto giant General Motors and Shanghai Automotive Industry Corp (SAIC), aims to account for 40 per cent in contributions to the ambitious blueprint of SAIC, which targets raising its annual vehicle output from the current 410,000 units to over 1 million by that time.

Scheduled to begin in August, the project is due to be completed in two years, according to Xiong.

The new production facilities will be located in the southern area neighbouring SGM's existing plants, though the detailed size of the area is not immediately available.

SGM will take care of all of the funding needs for the project, according to Xiong.

Although raising the output volume represents just one side of SGM's target.

"We are planning the production of Cadillac next year,'' said Xiong, who, however, added that even if the plan goes as expected, the production volume will not be very large in the near future. Cadillac is a prominent luxury vehicle brand owned by GM.

The introduction of the Chevrolet-brand vehicles, also a key product series of GM, is also under consideration, according Xiong.

SGM currently produces Buick series vehicles, including the Regal and Excelle, two mid-sized sedans, as well as GL8 commercial wagons. Its Buick Sail, a compact model, is now produced at a subsidiary company in East China's Shandong Province.

Adding those two new brands into SGM's vehicle lineup will lead to a complete product portfolio for the company, with Cadillac, Buick and Chevrolet representing respectively high, middle and low-end vehicle segments, said Xiong.

He also revealed that, through a recent operation integration, SGM will work more closely with the Pan Asia Technical Automotive Centre (PATAC), an auto engineering and design facility under GM, to acquire more technical support from PATAC in the future.

Analysts say SGM's plans reflects the company's resolve in securing its presence on the domestic auto market, which is showing signs of intensified competition.

Apart from Shanghai VW and FAW VW, two joint ventures of German automaker Volkswagen Group with SAIC and Changchun-based First Automotive Works Corp, SGM also faces pressure from rivals like Dongfeng Motor, and Guangzhou Honda that all have ambitious development plans to launch a variety of vehicles.

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