China has announced that it is going to slow outside investment in the nation’s car industry. Sales of cars in China will grow about 22% this year to seven million and 15% next.
It would appear that the Chinese government wants to guard against surplus manufacturing capacity in the industry.
The news may not be particlularly good for companies like GM. It is still unclear to what extent their joint ventures in China might be effected but sales for GM and its joint venture partners were up almost 37% in the first three quarters of this year to over 645,000 units.
GM needs its China growth to help offset revenue from falling market share in the US. It doesn’t need a problem in Asia.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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