GM plans to invest $16 billion by 2016 in US plants, more than what it plans to invest in China.
“The $11 billion in capital that will be spent in China by 2016 is coming out of our joint ventures rather than Detroit and is far less than the approximately $16 billion in capital GM will invest in the U.S. over that time, ” Selim Bingol, GM vice president of public policy, said in a letter published in the Wall Street Journal.
Last month GM said it will invest $11 billion in China, up from the target set in 2011 of $7 billion to be invested by 2015. In 2012 the automaker sold 2.84 million vehicles in the Asian country and it plans to reach 5 million units by 2015. By making the investment of $16 billion in the US, CEO Dan Akerson plans to increase operating margins to 10% by mid-decade from 7.4% in the last three years.
“Our investments in the U.S. and China reflect our determination to remain No. 1 in the world’s top two markets,” Greg Martin, a GM spokesman, said last night.
GM’s net income during the first quarter dropped 11% to $1.18 billion, while the EBIT in North America fell to $1.41 billion from $1.64 billion in 2012. International operations profit, including China, fell to $495 million from $521 million last year.