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China Business News has reported recently that GM plans of building a wholly owned research center in China and at the same time will tie up with FAW Group for the very first time to produce commercial vehicles.

Analysts see this move of General Motors as part of its aggressive development in China and also gives a hints of its strained relationship with its present sole Chinese partner, SAIC which is has recently rolled out its self-branded models.

If realized the new wholly owned engineering center of GM would become the sixth of its kind globally. The Shanghai-based newspaper also added that the Detroit-based automaker would benefit immensely from the lower research and development costs from the new engineering center.

The report further stated that it is also highly probable that a new venture would be formed with FAW Group, China’s leading commercial vehicle maker.

In an email sent by GM to China Business News, the automaker has stated: "Along these lines a number of different options are being explored, but at this stage we are not ready to make any announcement." However, Gao Yuan, a communications official from FAW Group has said that he is not aware of that.

An unnamed industrial analyst who used to work for GM was quoted by the China Business News as saying: "GM is not competitive in the commercial vehicle segment worldwide. A strategic alliance would help to speed up the development. But it is still hard to form one in a short period."

With regards to the R&D center, the analyst also said that it could help in growing GM’s ambition in China especially in growing sales volume. GM’s new venture is also regarded by the analyst as the automaker’s defensive move against its current Chinese partner that is already launching self-branded models.

SAIC has two ventures with GM and is now investing heavily in developing models that would carry its own name plate. The very first model of SAIC that was launched in the market has designs that were purchased from former British Rover Corp last 2005.