GM to Close Deals in China to Reach 5M Target image

According to anonymous sources GM and its Chinese partner SAIC plan to acquire ailing automakers in the Asian country.

GM, who is already the top foreign automaker in China, plans to boost its sales with 75% by 2015 to 5 million vehicles. One of the possibilities to accomplish its goal is to close a deal with other automakers and therefore expand its ventures. But to expand in China isn’t as easy as it seems. Foreign automakers have a limited number of partners they can have in the country and can own limited parts of the plants.

“It is much easier to get the government to sign off on their acquisition than to approve new capacity, ” said Han Weiqi, an analyst with CSC International Holdings Ltd. in Shanghai. “It is in line with the government’s mandate of consolidating the industry and reducing the number of players.”

GM and SAIC plan to open two facilities in China in 2014, a move which will increase production to 4 million vehicles. Still, in order to reach its 5-milion vehicle target, GM would have to take control of the assembly plants that aren’t operating at full capacity. GM managed to keep its place as the no.1 foreign automaker in China for the past 9 years, owning almost 14.7% of the market last year.