Autoshow - GM's China venture ups stakes against BYD, Great Wall

By Samuel Shen and Norihiko Shirouzu

GUANGZHOU/BEIJING (Reuters) - General Motors Co will step up its fight against China's indigenous carmakers such as BYD Co Ltd and Great Wall Motor Co Ltd by ramping up its passenger car business at a Chinese venture best known for making mini vans.

SAIC-GM-Wuling Co Ltd (SGMW), 44 percent-owned by GM, plans to roll out new models, including a hatchback and an MPV, under its newly-created Baojun brand next year, vice president Ray Bierzynski told Reuters.

He declined to give sales forecasts.

"It'll be an aggressive year for Baojun in 2014," Bierzynski said, adding that the brand, which means 'treasured horse' in Chinese and was created in 2010, mainly targets entry-level buyers in China's lower-tier cities.

"Every week, we're measuring ourselves against BYD, Chang'an, Chery and Great Wall ," he said at the Guangzhou auto show this week.

Foreign carmakers, through joint ventures, are increasingly moving toward the lower end of China's car market, a segment currently dominated by homegrown brands which compete by offering cheap products to buyers with shallow pockets.

Volkswagen AG, for example, is considering launching a budget car brand in China.

SGMW, which GM formed in 2002 jointly with China's biggest carmaker SAIC Motors Co Ltd and Liuzhou Wuling Motors Co, started by making commercial vehicles under the Wuling brand. Business has extended to include passenger vehicles, driven by rising income in China's second-, third-, and fourth-tier cities.

GM operates another passenger car venture with SAIC that sells higher-end brands including Chevy, Buick and Cadillac.

Annual sales of SGMW, based in southern China's Guangxi, has more than doubled over the past five years to around 1.5 million units, partly helped by the popular compact MPV, Wuling Hongguang, and Baojun Le Chi minicar, a localised version of the Chevrolet Spark.

Bierzynski said such growth exceeded expectations: "This is a pretty rapidly evolving market and we have to learn as we go ... and take advantage of the trends."

(Editing by Jeremy Laurence)