General Motors Corporation (NYSE:GM) is boasting that its sales in China will grow 15% next year, slightly faster than the overall growth rate in the Asian country. Great.
But GM's sales in China grew over 37% in the first nine months of 2006, so the projection would appear to be a significant slowing. GM sold over 645,000 vehicles in China during that period.
None of this will matter if GM cannot improve operations in North America, where the competition is getting stronger everyday. Toyota Motor Corporation (ADR) (NYSE:TM) is about to see what it can do to the largest US car company's core product line, pick-ups. Toyota is investing $1.2 billion in a new plant in Texas to build its Tundra pick-up.
Car industry analysts see Toyota's move as a way to pressure margins in the key pick-up segment. Pick-ups not only have large sales volumes, they also are highly profitable.
GM can do what it wants in China. Its largest rival is coming from Japan to eat its lunch in the US.
Douglas McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
11-16-2006 @ 5:49PM
sam smith said...
I live in the Detroit metro area. Michigan has serious economic issues and only when the people pull together can the problems be overcome. It’s going to take everyone not just democrat or republican A great place to find out Michigan and Detroit is MICHIGAN AND DETROIT
11-16-2006 @ 7:05PM
sam smith said...
I live in the Detroit metro area. Michigan has serious economic issues and only when the people pull together can the problems be overcome. It’s going to take everyone not just democrat or republican A great place to find out Michigan and Detroit is MICHIGAN AND DETROIT
11-17-2006 @ 10:11AM
Byron Spain said...
Despite the fact that Toyota is now building pickups in San Antonio it has a long way to go to fully penetrate this market. The Tundra is a direct competitor to the F-150 that is preferred by most city boys but is a long way from meeting the needs of ranchers, construction workers and those hauling boats and trailers. Until Toyota builds a superior competitor to the F-250/350 with a diesel engine, it will never fully penetrate this market.
11-20-2006 @ 4:33PM
A D said...
GM is hot on VW's heeels to be the DOMINANT player in China's market.
Toyota is strugling to get a foothold in China. There is considerable resistance to anything Toyota tries to do in China. Reason? The Chinese simply do not trust them.
Why is GM putting this effort forth? Well the truth is, "our" government has sold out to the nations that are buying "our" debt. Do you realize that if you hold cash in Japan, your returns are below single digits? The lending rate has just been raised to .25%. Yes, point 25%. Why are they doing this? They do not want anybody to carry any debt except for US debt. You got it, they are the tail that is wagging the dog. they are making a deliberate effort to exploit global markets for their products and others debts. It's not a matter of building a better product, it's a government that is so manipulative and protectionist that it does not allow "our" government to react. They simply own all the money Bush has been borrowing so what is he going to do? Whatever they say.
So what's the best thing to do? In my book it's avoid as much of their stuff as posible. Screw the Consumer Reports ratings, save "your" nation if you still can.
BTW, the Tundra will land with a thud just like the Nissan big truck, both of these trucks are beyond ugly and only a pimp will drive them.