GM Looking To Buy Chinese Brands

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According to Chinese media reports and reports from Bloomberg, GM are apparently looking to buy into struggling Chinese auto manufacturers. By 2015 GM is expected to lift its China sales by 75% to roughly 5 million units per year, and by buying a Chinese brand they will be able to increase capacity relatively easy.

Despite joining the World Trade Organization, China still has strict regulations for foreign automakers entering into the Chinese market to produce vehicles, all foreign manufacturers must enter into a joint venture partnership with local partners. China currently has 71 passenger vehicle manufacturers, but ten of those did not achieve sales in 2012 which seems like a strong oppertunity for a foreign manufacturer to assist the Chinese government with its plans for merging and shrinking the Chinese auto industry into a more streamlined market.

In the early days of opening and reform, many car manufacturers sprouted up like grass in the Guandong area, these companies focused on assembling CKD kits of vehicles from major manufacturers and applying their own brands, see this San Xing Voyager for an example.  Several of these minor companies with minor sales figures are circling the drain as they struggle to sell vehicles, and would present a good opportunity for a major company to further their investment in the Chinese market.

About the author  ⁄ FrankF

Frank entered the automotive industry via his father's instructions. He grew up with cars around him, especially as his father was a major auto restorer, Frank's childhood was spent passing beers, tools and coffee to his father whilst he explained the ins and outs of engines. Frank now works in the Chinese car industry at a specific manufacturer.

One Comment

  • dragin
    February 7, 2013

    Beijing would have to want this consolidation so badly that they move to streamline the jv approval process, or, allow an acquisition as they do for partsmakers, or as in the case of American Zap Auto. The Western press reported that Zap had acquired Jonway, but I remain skeptical that current Chinese law would have allowed it.

    Shifting gears,….lately I have been hearing this reference to an elusive number of 71 manufacturers. Aren’t there many more? I wonder if it perhaps refers to the number that are legally licensed to produce.
    And then there’s the number “ten” for those which couldn’t find buyers for even one, of the units they produced in 2012. I can’t but wonder what the names of these “ten” are.

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