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China’s New Vehicle Restrictions Are Bad News for GM

General Motors still aims to increase sales in China


General Motors NYSE:GMChina, in an effort to increase air quality, is limiting vehicle sales in certain areas of the country. One of these areas is Shijiazhuang, the capital of  Hebei province. The number of new vehicles allowed this year is 100,000 reports Bloomberg, with more limitations in coming years. With only a limited amount of vehicles available each year, China plans to hold lotteries to determine which citizens will be able to purchase vehicles.

All of this spells trouble for General Motors (GM), as it plans to increase the sale of its luxury vehicle, Cadillac, in China.

“We are not only expanding in tier-one and tier-two cities, which would be pretty logical to Cadillac, but … China’s high-growth areas could be in tier-three or even four,” Bob Socia, head of GM’s China operation, told The Economic Times.

GM stock showed little change, only slightly increasing as of midday Wednesday.

Article printed from InvestorPlace Media,

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