GM to export Chines vehicles to the U.S.

[TheMuffinKing]

Link

SHANGHAI – General Motors Corp. plans to begin exports of vehicles made in China to the United States within two years, ramping up sales to more than 50,000 by 2014, reports said Wednesday.

A spokeswoman for GM in China did not immediately respond to a request for comment on the reports, which were said to be based on a company recovery plan given to U.S. lawmakers.

GM intends to sell 17,335 made-in-China passenger cars in the U.S. market by 2011, the Shanghai Securities News and other reports said. By 2014 exports would triple to more than 51,000, it said.

The main focus would be on exporting small cars similar to the Chevrolet Spark, the reports said.

If true, GM could end up becoming the first automaker to begin exporting to the U.S. from China: previously announced plans by Chinese manufacturers to crack the U.S. market have so far fizzled.

Most Chinese automakers have been daunted by the challenge of meeting stringent U.S. safety standards. They also face the uphill battle of winning consumer confidence for their unfamiliar brand names.

Brand name recognition is perhaps the least of GM's problems as it faces a June 1 government-imposed deadline to finish a restructuring plan or follow Chrysler LLC into bankruptcy protection.

Opting to export from China would help the company, now surviving on $15.4 billion in federal loans, to slash production costs and make full use of its huge investments in factories here.

But it would likely raise protests from labor unions it has been seeking to win concessions from as part of its restructuring.

The plan also would represent a shift from past strategy. GM officials have long emphasized their commitment to first meeting demand in China before considering exports to the U.S. or other markets.

Personally, I'd rather we maintain the manufacturing infrastructure here and continue to produce GM cars in America.

[Ma Deuce]

I wouldn't be surprised if this was due to some kind of deal worked out with SAIC, GM's partner in China. They'd reportedly been interested in buying the Buick brand recently, or pulling out of the partnership on account of GM's financial troubles, so giving them the opportunity of experience building cars for the US market might make it worth their while to stay on (ending the partnership or selling Buick would effectivly force GM to exit the Chinese market). While I'm not thrilled with this either, I wouldn't get worried about GM shipping all it's US production to China just yet; the car in question is after all a completely new model in a segment GMNA has never entered before (smart-sized minicars), and 50,000 per year is less than 2% of their current US volume. While I expected this model to be imported from the start, I'd assumed it'd be from Korea like the Chevy Aveo currently is.

[Sea Skimmer]

The only reason GM exists today is because it’s done so well in the Chinese auto market. That money kept them from dieing years ago. Unfortunately that market has sunk as the world economy has sunk so now GM has surplus plant capacity in China. Given the choice between closing Chinese plants, and importing cheap Chinese cars and closing American plants with bloated union workforces when you face bankruptcy is an easy decision.

Personally, I'd rather we maintain the manufacturing infrastructure here and continue to produce GM cars in America.

Even if that means the company just collapses into dust? That is whats happening the way things work now. It will stop, one way or another.