GM is set to sign a £69m deal with its long-standing partner Shanghai Automotive Industry Group to invest in a new car plant in China. The new Yantai Bodyshop plant, which will be joint-owned by GM and SAIG, will effectively increase GM's car production by 50 per cent.

The two companies' existing joint venture, Shanghai GM, is China's third largest carmaker with an 8.6 per cent market share. That company is enjoying a major sales boon in the country with its sales forecast to double this year to 110,000 on the back of a steady economic growth in what is potentially the World's largest car market. Clear leader in the market is Volkswagen, which produces 40 per cent of all cars in China.

• Volvo is also studying the possibility of producing cars in China, according to the China Daily newspaper. John Dirckx, Volvo Asia/Pacific Region president says that any Volvo initiative will depend on Ford's overall plans for China.