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View Full Version : Our GM investment pays off big in China


bronclvr
06-22-2009, 03:43 PM
GM JV marks two millionth Buick sold in China
Mon Jun 22, 2:27 am ET
SHANGHAI (AFP) Struggling US auto giant General Motors said its joint venture in Shanghai sold its two millionth Buick in China, as sales have rapidly picked up in recent years with the country's economic boom.

"It took eight years for Shanghai GM to sell its first one million Buicks, but only three years to sell its second one million units," said Kevin Wale, President of GM China, in a statement emailed to AFP.

"This demonstrates the ongoing popularity of Shanghai GM's leading mainstream brand in what is now Buick's largest market."

The two millionth unit, a red New Regal sedan built by a joint venture with China's largest automaker Shanghai Automotive Industry Group, was delivered to its owner in the southern city of Guangzhou, the statement said.

GM's first Shanghai sales office opened in 1929 and Buick customers included Pu Yi, the last emperor, revolutionary leader Sun Yat-sen and late premier Zhou Enlai.

Despite its US parent filing for bankruptcy, GM China has seen sales hit new highs on strong demand from the nation's increasingly affluent middle class and incentives to stimulate domestic consumption.

China overtook the United States to become the world's largest car market for the first time in January.

And GM chief executive Fritz Henderson has said GM car sales in China are set to surpass those in the United States this year in a landmark shift.

GM China is still aiming to double sales to more than two million units annually and will "probably need to build another plant in the next five years", Wale said.
GM sales in China jumped 75 percent in May from a year earlier to a record monthly high of 156,000. In the first five months, sales grew 33.8 percent from the same period a year ago to more than 670,000. :wave:

Garcia Bronco
06-22-2009, 03:44 PM
Owning a car in China is super expensive relative to what we pay here.

Popps
06-22-2009, 03:48 PM
I know Ford has been doing very well over there for some time, now.

I think Ford is a great long-term investment here at about $5 for anyone looking for something to stow away and forget about.

400HZ
06-22-2009, 04:17 PM
I know Ford has been doing very well over there for some time, now.

I think Ford is a great long-term investment here at about $5 for anyone looking for something to stow away and forget about.

They are going to be at a huge competitive disadvantage to GM and Chrysler when those two renegotiate all their debt and standing contracts down during their bankruptcy. The airline industry has always been a great example of this. The companies that file and emerge early have the quickest turnarounds while the companies that avoid bankruptcy filings end up unable to compete because of their higher costs.

Ford's total liabilities still outnumber their total assets by between $20 billion and $50 billion. That doesn't really scream "great investment opportunity."

ghwk
06-22-2009, 04:54 PM
The Chinese can have all the Buick Regals they want. Seriously would you want one?

Popps
06-22-2009, 05:05 PM
They are going to be at a huge competitive disadvantage to GM and Chrysler when those two renegotiate all their debt and standing contracts down during their bankruptcy. The airline industry has always been a great example of this. The companies that file and emerge early have the quickest turnarounds while the companies that avoid bankruptcy filings end up unable to compete because of their higher costs.

Not a good analogy.

People don't care what airline they fly on. It's about who offers the best rates and to where.

People plopping down 25K on a vehicle are going to be reluctant to do it from a company in bankruptcy. GM is also selling off several of their brands.

Ford will have the next couple of years of GM turmoil to continue to gain market-share in U.S. and abroad.

People briefed on G.M.s finances said the automaker would require debtor-in-possession financing during its reorganization of $40 billion to $70 billion.

If G.M. drew the full $70 billion while in bankruptcy, the government would have provided the company with more than $90 billion in total, including the money it has drawn to dat

Meanwhile, Ford is expected to be profitable sometime within the next 18 months or so.

So, as for it not "screaming invevstment opportunity," people might have said that 500% ago, when it was trading around a buck, too. At $5, hedge funds and retail investors are going to start wanting to own a chunk of this thing in a year or so.

The markets look forward, and Ford has not only made huge strides on the quality of their vehicles, but they'll actually turn a profit in the somewhat near future.

gto2005
06-22-2009, 08:28 PM
GM has the largest market share of any manufacturer in China which will be the largest vehicle market as soon as this year. Buick is GM's number one brand in China...GM has been selling more Buicks in China than the US for Several Years. The product lineup is substantially different in China vs the US. For those that think the Buick Regal is stodgy...take a look at China's version http://carscoop.blogspot.com/2008/12/2009-buick-regal-mega-gallery-opel.html. A truly stunning vehicle

Here is the Chinese Buick Park Avenue http://www.edmunds.com/insideline/do/News/articleId=120408

and Buick in the US gets a new Buick LaCrosse which is really sharp. Take a look. http://www.buick.com/lacrosse/2010/

China has been a very bright spot for GM...

It shows when the company isn't saddled with extreme dept and legacy costs it can compete quite well.

If GM comes out of this BK with its balance sheet cleaned up and a streamlined/focused organization it will be a major force in the marketplace again.

Take a look at the New Chevrolet's coming out. The Malibu was a great hit and continues to do well. The New Camaro is lights out and is selling great. The New Equinox is just shipping to dealers now it will have a class leading 32 MPG and over 600 mile range. Next year they get a long overdue Cobalt replacement that will get over 40 MPG on the highway...then by the end of next year they will launch the all new Chevrolet VOLT which will be the first mass produced electric vehicle with a range extending engine that will act as a generator...really amazing technology.

The car industry has been up against the ropes before and come back stronger and more competitive....

I will bet that the Money put towards GM will be repaid long before the AIG/Fannie Mae/Freddie Mac/Citibank money gets repaid...if at all.

UberBroncoMan
06-22-2009, 08:54 PM
People forget that there is a big difference between cars that a company makes and sells overseas vs cars that they make here (unions) and try to sell here.

ColoradoDarin
06-22-2009, 09:40 PM
How is this wasting $50 billion on GM "paying off big in China"? It's not like they sold these cars all after it became Government Motors.

watermock
06-22-2009, 11:30 PM
The Buick Park Avenue for China shares sheet metal with the Daewoo L4X, although the Buick has different front and rear fascias. (Photo courtesy of GM China)

That is a totally different entity from US GM, just as most multinational brands, like IBM, ect. Multinational companies owe no allegiance to america, and act accordingly.


Oh, BTW, Ford IS at a compeditive disadvantage, they will be the "sacrificial chicken" for socialism. 'cept for the Bankers.

To them, the fed is just another tool in their arsenal. Now they own the government.

The "free trade" that promised us cheap imports signaled the end of american industry.

400HZ
06-23-2009, 12:52 PM
Not a good analogy.

People don't care what airline they fly on. It's about who offers the best rates and to where.

People plopping down 25K on a vehicle are going to be reluctant to do it from a company in bankruptcy. GM is also selling off several of their brands.

Ford will have the next couple of years of GM turmoil to continue to gain market-share in U.S. and abroad.

People briefed on G.M.s finances said the automaker would require debtor-in-possession financing during its reorganization of $40 billion to $70 billion.

If G.M. drew the full $70 billion while in bankruptcy, the government would have provided the company with more than $90 billion in total, including the money it has drawn to dat

Meanwhile, Ford is expected to be profitable sometime within the next 18 months or so.

So, as for it not "screaming invevstment opportunity," people might have said that 500% ago, when it was trading around a buck, too. At $5, hedge funds and retail investors are going to start wanting to own a chunk of this thing in a year or so.

The markets look forward, and Ford has not only made huge strides on the quality of their vehicles, but they'll actually turn a profit in the somewhat near future.

That's debatable. If GM successfully uses their bankruptcy to overhaul their antiquated cost structure into a modern, flexible system with lower fixed costs then they will emerge as a viable company. Ford has most of the same problems as GM, they've just been better at keeping cash on hand.