GM's Chinese Dej Vu Moment
While GM's North American operation has been hemorrhaging money like a hemophiliac having heart surgery, its overseas operations have managed to turn enough profit to keep them from the bankruptcy court. Chinese sales are still growing, but the boom may go bust. In 2007, sales increased 19 percent. So far this year, sales are up 14 percent. Although China's still the world's fastest-growing auto market, raw material costs are soaring, and The People's Republic is easing off fuel price subsidies. Through their "joint venture" (i.e. shotgun wedding) with Shanghai Automotive Industry Corporation (SAIC), GM is the Republic's largest carmaker. But they're beginning to face stiff[er] competition from Toyota and Volkswagen. Joseph Lau, vice president for GM China, told Bloomberg "Shanghai GM has been facing difficulties by relying on existing models to compete with rivals that have added new ones." Sound familiar? Lau added that GM/SAIC has only one new model in the pipeline for this year: a locally-made hybrid version of the Buick LaCrosse. They're adding one new model next year, a Buick sedan to compete with the rapidly-growing Camry and Corolla. Does anyone know the Chinese translation for "Those who do not learn from history are doomed to repeat it"?
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