General Motors (NYSE: GM) will try to increase its market share in China during the second half of the year. The overall market there is growing at a 21% rate in 2008. According to Bloomberg, "The Detroit-based automaker plans to invest $1 billion annually in China over the next three to five years."
GM will introduce a number of new models in the big Asian country, one of which will be a hybrid.
But, sales in China may not be enough to help to GM. Its market share is still dropping in a weak U.S. market. While China may not have been a competitive market a decade ago, every major auto company in the world wants a piece of the action now.
GM is up against Toyota (NYSE: TM), Volkswagen, and several other companies that already have large factories and joint-ventures with local operators. The home-grown Chinese companies do not want to be bested by their foreign rivals. In other words, GM is hoping to get much of its international growth out of the most sought-after market in the world.
Without a big win in China, GM's global problems could deepen.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
4-20-2008 @ 2:52PM
Allen said...
I honestly belive GM will fail. They just have no real strengths. Their European division is the last good one.
4-20-2008 @ 2:59PM
gumbo koontz said...
suppose gm decdie to shut down all North American plants, how much will GM write off in losses if it will not mean bankruptcy. If GM can get away with it without facing bankruptcy, I say go for it. We are tired and fed up witih UAW messing with our holdings in GM stock. Let UAW go all of them. GM can build cars overseas and sell to us here . whatever.. at least they come with American name on it.
4-20-2008 @ 5:04PM
John said...
The UAW is and has strangled GM and the other american auto companies where at last they will choke and die. Unions are not needed in this nation any more and they are destroying the industries they are in because they make us non competitive. Look at the Toytoa, Honda, and Mazda factories in the US. They are non union and competitive. In fact they are growing. It makes me sick to see US industries fail, sell, and go out of business. One day we will all be working for the Chinese or Japanese. Buy American and tell unions to back off and allow us to compete.
4-21-2008 @ 5:55AM
Joseph Luk said...
I think its already too late. The Big Three, are handcuffed by the UAW and cannot outsource the jobs necessary to be more competitive. Most of this pain could have been avoided if GM, Ford and Chrysler reduced its U.S. workforce dramatically and retooled its supply chain to take advantage of cheaper labor around the world 3-5 years ago. Sure, many UAW workers would have been laid off and others would have been bought out, but does it make much difference if all three companies are not able to survive the decade? With the dollar falling to record lows, rising gas prices and a U.S. recession, the big three are going to die a slow, painful death. I can see foreign automakers salivate at the prospect of acquiring GM, Ford and Chrysler for pennies on the dollar. As more and more foreign auto companies open factories in the U.S. to take advantage of the exchange rate and cheap labor, the more convinced I am that the UAW will have selfishly killed off one of the most important parts of the U.S. economy.