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According to The Financial Press of India and several other press sources, General Motors Corp's (NYSE:GM) big Chinese partner, Shanghai Automotive Industry Corporation, will go it alone in addition to its participation in its current joint venture with GM and Volkswagen. Shanghai Automotive has made it clear that it has now learned enough from its two partners to start its own design and production facilities that will have an output of 400,000 engines and 300,000 cars by 2010.

Although GM and VW have publicly wished the new venture, called SAIC Motor, their best wishes and have made it clear that they knew the Chinese would move out on their own at some point, investors have to question whether the Chinese market is about to become substantially less attractive for the troubled U.S. company.

Even though the Chinese car market is likely to grow at a rapid pace for several more years, as the local manufacturers set up their own independent operations the pie is going to be sliced into several more pieces.

According to the Chinese Association of Automobile Manufacturers, the country is expected to product six million cars, trucks and buses, in 2005, a 20% increase over 2004.

Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also the president of Switchboard.com when it was the 10th most visited site on the internet, according to MediaMetrix. He can be reached at douglasamcintyre@gmail.com.

Source: GM's Chinese Menu (GM)