GM aims to increase sales in China to 5 million

Article by Christian Andrei, on February 12, 2013

General Motors Co., together with Chinese automaker SAIC Motor Corp., has expressed interest in the acquisition of struggling automakers in China, sources have told Bloomberg. GM is working under the belief that the Chinese auto industry should have undergone consolidation a long time ago. These sources added that GM, which has already been named as the top foreign automaker in China, seeks to boost sales by about 75% by 2015 to 5 million.

It’s believed that entering a deal with another automaker is a way for its ventures to expand. The Chinese government aims to keep jobs but at the same time, it is urging consolidation that is reminiscent of the auto industry’s shrinking about a hundred years ago that made GM the largest automaker in the world for 80 years.

To expand in China, it’s not as simple as buying a plant there. Foreign automakers are restricted on how many partners they can have or what percentage of a plant they could own. In 2012, China said that it won’t provide incentives for foreign-owned auto plants.

This led to the increase in the value of China’s many underutilized auto plants. Around 10 of China’s 71 automakers weren’t able to sell one vehicle last year. Han Weiqi, an analyst with CSC International Holdings Ltd. in Shanghai, said that it’s a lot easier to ask the government to approve an acquisition than to allow new capacity.

The analyst also said that this corresponds with the government’s order to consolidate the industry and lessen the number of players. LMC Automotive said that China has the most overcapacity in the world. Plants in China can deliver about 10 million more vehicles than they presently produce.

This is higher than the number of vehicles built in any country other than China or the U.S. GM and SAIC intend to open two assembly plants in China in 2014. In that case, their joint ventures can produce just around 4 million cars, sport-utility vehicles and microvans annually.

Topics: gm, china, sales

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

The 2018 model year could be an exciting year for fans and enthusiasts of the Chevrolet Corvette. This comes as the 2018 version of the Corvette is bound to feature...
by - January 19, 2017
As if seeing the future more than a decade from now, one of the top scientists in the world of robotics and automations is predicting that children born today won’t...
by - January 19, 2017
Ford has just recently unveiled the 2018 Ford Mustang, and as it turned out, the carmaker gave its beloved pony car a facelift. There have been mixed reactions about the...
by - January 19, 2017
The bidding war for one of the only 20 examples -- 21 actually, but the 00 version went to a museum -- of the classically beautiful Lamborghini Reventon built and...
by - January 18, 2017
Bentley once again confirmed its plans to push PHEV into their future lineups. As a matter of fact, the Bentayga SUV will be the first to have the plugin hybrid...
by - January 18, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries