Wednesday, May 1, 2013

GM Is Expanding Auto Production In China And Planning To Sell Chinese Made GM Cars In The US

Posted by Milton Recht:

From The Wall Street Journal, "Edward Niedermeyer: Welcome to General Tso's Motors: Long an important growth market, China is becoming GM's global export base." by Edward Niedermeyer:
American taxpayers may have rescued GM during its moment of need, but it is China that is disproportionately benefiting from the bailout of America's erstwhile automotive icon.

GM's most recent round of investments vividly demonstrates the change. At last week's Shanghai Auto Show, GM announced it would spend $11 billion on new production facilities in China by 2016, creating some 6,000 new jobs there. By contrast, GM has invested only $8.5 billion in U.S. operations since its 2009 bankruptcy, and since 2005 the number of workers it employs in North America has fallen by 76,000, according to the industry publication Automotive News.

At first glance, this seems little more than a function of China becoming the world's largest auto market. But GM's investments aren't merely about meeting Chinese demand, which has actually slowed in recent years. According to statements to the press made by company officials at the Shanghai Auto Show, GM is targeting 100,000-plus exports of Chinese-made cars this year, a record, with export growth likely to be more than 50%.

Once merely an important growth market, China is fast becoming GM's global export base, and the change can be seen in the very structure of the company.
As the result of the company's new emphasis, GM China President Bob Socia says that Americans "could very well" soon find Chinese-made GM cars on showroom floors. "There is no reason why we can't be exporting to the [United] States," he told a reporter for the website Autoblog at the Shanghai Auto Show. [Emphasis added.]

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