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NINETY EIGHT REGENCY

GM eyes more China buys amid consolidation

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GM eyes more China buys amid consolidation

Reuters / April 20, 2007 - 9:45 am

SHANGHAI (Reuters) -- General Motors CEO Rick Wagoner said today that further consolidation was inevitable in China's fragmented autos market, and GM would be active in any shake-up.

Wagoner said that GM was interested in maybe buying smaller local operations in China as a tool to expanding in the world's fastest-growing car market.

"We've been playing in the consolidation business (in China) and it worked great for SGM, and we'd be interested in more," Wagoner said, referring to a tie-up with Shanghai Automotive Co. Ltd. (SAIC).

"I think over time there's going to be more prospects because clearly there are a lot of manufacturers here that are small volume," Wagoner said. It's inevitable there will be consolidation and we want to be part of that," he said, adding that nothing imminent was in the pipeline.

GM has forecast its 2007 China sales will grow by over a fifth from 876,747 vehicles last year, as it rolls out new models to attract increasingly affluent buyers in the world's fourth-largest economy.

The Detroit-based group launched the higher-end Buick Park Avenue models earlier this month, targeting China's business elite. Shanghai GM expects to sell around 6,000 of the Park Avenue line this year. The model is priced at up to $64,550 (498,800 yuan).

Shanghai GM sales rose 26.5 percent in January-March.

GM plans to launch about 10 new or upgraded models this year. GM is investing around $1 billion a year in China, its biggest market outside the United States.

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Just like the early days of GM in America.

I like what's going on in China now and I hope GM duplicates its rise to power and dominance in America and does it all over again in China. Since China is still Communist though, I don't think the government would like it too much if GM (and maybe VW) overtake their domestic automakers. I'm pretty sure if the US was China, the Chinese gov. wouldn't let whats happening today with the US auto industry happen.

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Just like the early days of GM in America.

I like what's going on in China now and I hope GM duplicates its rise to power and dominance in America and does it all over again in China. Since China is still Communist though, I don't think the government would like it too much if GM (and maybe VW) overtake their domestic automakers. I'm pretty sure if the US was China, the Chinese gov. wouldn't let whats happening today with the US auto industry happen.

Well, it's sad, but the Chinese Government will probably protect GM more than the USA ever has. Of coarse, it's to benefit their local government, but that is why the USA should do the same thing! So if you think about it (from a company standpoint), what incentive would GM have to not move everything to China. Or say, China does not get their bootlegging under control. There are many other upcoming countries that would be happy to take GM's business (like Vietnam.......now that's a sad thought).

Edited by Clownzilla
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China is communist in name only. In operation it's now more fascist, a form of centrally-planned socialism that includes private enterprise and capital markets. Most of these manufacturers are probably losing money already and exist only to keep people employed. Most are still using ancient OHV (yes pushrod) Isuzu and Toyota engines, and will need to spend billions to develop their own modern engines. At some point Beijing will tell the various provincial governments and departments they can't have any more money and will have to partner with or sell out to an automaker that is making money and which needs the capacity. SAIC is already lobbying to take over NAC, Chery has already bought JAC, Changan controls Jiangling, FAW took over Tanjin Xiali years ago. How long before FAW & Toyota buy Shenyang Brilliance? Before Changan buys Changhe, or CMC/Soueast buys Dongan. There are any number of small Chinese manufacturers which will eventually be bought up by the larger players. Since they are almost all state-owned (even if the largest are publicly listed) there will be little political concern in Beijing.

GM already produces vehicles in Vietnam under the Daewoo brand.

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