General Motors (NYSE:GM) is looking to grow its sales in China by 75% over the next two years and will seek the acquisition of struggling Chinese automakers to fuel that growth, unnamed insiders told Bloomberg.
Already, the leading foreign car-maker in China, GM is hoping to sell about 5 million vehicles in China by 2015. The company has $23 billion in cash that could be used to fund acquisitions.
As a foreign company operating in China, GM must comply with a number of regulatory restrictions. Those include a limit on the size of its stake in Chinese factories and the extent of its partnerships with Chinese companies.
There are 71 auto-making companies in China, but 10 of them failed to sell any cars or trucks in 2012. Obtaining government approval for the purchase of a failing company would be easier than convincing Chinese regulators to allow GM to expand its existing Chinese factories or partnerships.
A GM spokesperson told Bloomberg that the company had no current plans to boost its production capacity in China through acquisitions.
Shares of GM slipped more than 1% in Wednesday morning trading.