As GM (GM) grovels in Washington for another hit of cash to add to the $13.4 billion it’s already received, the company can thank Chinese taxpayers for the one area that it’s doing well.
See, it’s frequently noted that GM is actually having success abroad (contrary to what you might expect) and that China is a good example of how it can compete internationally. That’s true, but it’s also on the government dole there, too.
As Bloomberg notes, the automaker will get a $1,170 per vehicle subsidy to help it sell vans.
Vehicle sales in China may rise between 5 per cent and 10 per cent this year, according to GM, the largest overseas automaker in the country. It had previously forecast sale growth of less than 3 per cent. The automaker expects to outperform the wider market by as much as 3 percentage points, helped by sales at SAIC-GM-Wuling Automobile Co., the largest minivan-maker in China. The venture accounts for at least half of GM’s China sales. SAIC Motor Corp. gained 2 per cent to 9.88 yuan in Shanghai today. The stock has gained 84 per cent this year.
“There’s a very direct link between the government’s efforts to boost rural consumption and Wuling’s rising sales,” said Nick Reilly, GM’s Asia-Pacific president. “The government has also come out with its stimulus package and the stock market is up and that’s giving people confidence to spend again.”