GM Looking to Buy Chinese Car Makers

It is looking to produce 5 million cars in China by 2015

   

GM Looking to Buy Chinese Car Makers

GGeneral Motors1 300x199 GM Looking to Buy Chinese Car Makerseneral 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.

Toyota 200x200 GM Looking to Buy Chinese Car Makers
Toyota Retakes Global Auto Sales Title

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.

Other automakers are also looking to build their presence in China, including Volkswagen (PINK:VLKAY), Ford (NYSE:F), Fiat’s (PINK:FIATY) Chrysler, Nissan (PINK:NSANY) and Hyundai.

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.


Article printed from InvestorPlace Media, http://investorplace.com/2013/02/gm-looking-to-buy-chinese-car-makers/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.