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GM to build factory in China as U.S. plants close

By George Gao  From Gasgoo.comApril 24, 2009

Shanghai, April 24 ( General Motors Corp., shutting down U.S. plants in a bid to avoid bankruptcy, is likely to build a new factory in China on surging demand.

"Operations in China are profitable and in the future China can finance its own growth," Nick Reilly, the company's Asia-Pacific president, said at the Shanghai auto show this week. He stressed that GM's restructuring plan would not affect its business in China.

Reilly revealed that GM would not close any of its plants in China, where it will build a new factory in future. He didn't give a timeframe for the new plant, but all is in preparation, according to GM China CEO Kevin Wale, who said in mid-April that GM would need one new facility in China to reach the target of selling two million units.

GM expects to build on its recent China sales success and double annual sales in the country to more than 2 million vehicles within five years, with more than 30 new and upgraded models to be introduced in that period. The U.S auto giant makes vehicles in China through two ventures, both backed by SAIC Motor Corp.

As the biggest overseas automaker in China, GM boosted sales in the country 38% last month as government stimulus measures spurred demand for its minivans. By contrast, the company's U.S. sales slumped 45% on the recession.

The company is seeking to shed some brands, cut 47,000 jobs worldwide this year and close 13 plants in the U.S. for nine weeks as it faces a June 1 deadline to avoid a U.S. government-urged bankruptcy.

GM will keep its "most profitable" Buick brand, Reilly said. The carmaker is trying to sell or close Saturn, Hummer and Saab out of its eight brands. The Chevrolet, Cadillac and Buick brands are likely safe, all of which are also made in China.

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