BEIJING, May 18 -- Motors Insurance Corporation, a wholly-owned subsidiary of GMAC Insurance Holdings, recently set up a representative office in Shanghai as it drives into China's auto insurance market.

    The insurance office, approved by the Chinese Insurance Regulatory Commission, is expected to help General Motors Corp to further expand its financial business in China and tap the potential of the huge auto insurance market in the nation.

    GMAC, the financial services subsidiary of GM Corp, teamed up with Shanghai Automotive Industry Corporation to form the GMAC-SAIC Automotive Finance Co Ltd, offering retail and wholesale auto financing.

    MIC will apply for an insurance company license following two years of waiting, which is required by Chinese regulation on foreign insurance companies before they could officially run the business in China.

    The representative office will be responsible for market research, undertake feasibility studies and build important relationships.

    The commission also approved the appointment of Henry Dai as chief representative of MIC in Shanghai.

    "China's financial services sector is developing very quickly. By working closely with our partners, GMAC Insurance aims to support the sale of vehicles with high-quality insurance products, "said William Noll, president of GMAC Insurance.

    The auto insurance sector is expected to grow rapidly in the coming years as all vehicles must have insurance. China's car sales jumped more than 40 percent nationwide last year.

    Most of the property insurance companies such as Ping'an Insurance Corp and People's Insurance Company of China also offer auto insurance while a number of professional auto insurers such as Taiping Insurance Corp and Zhongbang Insurance Corp has also emerged.

    The profit ratio of auto insurance averaged more than 10 percent, higher than other insurance and almost accounted for half of the total sales revenue of property insurers.

    Separately, Reuters reported GM will cut 900 jobs at its plant in northwest England to boost productivity, dealing the latest blow to Britain's carmaking industry.

    GM, the world's largest carmaker by volume, said yesterday it would axe one of three shifts at its Ellesmere Port plant, affecting about 900 jobs as it seeks to compensate for an expected fall in sales of its Astra compact model.

    (Source: Shanghai Daily)