GM to move money from China to save U.S. market
Shanghai, October 16 (Gasgoo.com) A senior GM executive said the company has plans to move money from Chinese operations to compensate for its North American losses, the National Business Daily reported Thursday.
Bob Lutz, GM's vice-chairman said yesterday that besides selling the Hummer brand, GM is also mulling transforming revenues earned in the Chinese market into its home market to cover significant losses the automaker has made there.
"We do not rule out such a possibility under current conditions,” he said.
He explained the home market is really in a mess due to plummeting industry sales and consumer preference for small, fuel-efficient vehicles instead of profit-rich SUVs and pickups.
Earlier this year, GM CEO Rick Wagoner promised that GM and its joint ventures in China will invest around $1 billion annually in the next few years to boost R&D capacities and accelerate its expansion in China but, amid the current crisis, to save North America market is now becoming the automaker's first priority.
But anyway GM delivers on its words. Earlier last month, it broke ground for a $250 million corporate campus in Shanghai, including a technical center that will study alternative fuels.
Though GM sales in China did fall in August and September, GM Asia Pacific President Nick Reilly is expecting sales in the market to pick up again in the fourth quarter of 2008, and overall he expects sales growth in China this year of between 11 pct and 12 pct, down from 12-15 pct growth projected in March.
The U.S. auto maker says it sold 1.05 million vehicles in China last year -- more vehicles than any other companies.
GM cars outside a US dealership