Troubled GM likely to up investment in China

Shanghai, December 1 (Gasgoo.com) Shanghai GM, the joint venture between China’s SAIC and General Motors (GM), will continue to increase investment despite the troubled U.S. auto giant General Motors amid financial crisis, peplenet.com said today, citing SAIC vice president and Shanghai GM general manager Ding Lei.

The reports on GM’s cash flow are neither accurate nor comprehensive, Ding noted. GM still has advantages in some aspects such as new technology reserve and the auto giant is keeping a good momentum in markets like Latin America and Asia-Pacific regions. The US government would not drop its auto market, which is the largest one around the globe and still has demand, Ding stressed.

It is said the recession of North American auto industry brings great potentials for the development of Chinese auto industry. According to Ding, sales decline amid the financial crisis hasn’t exerted much pressure on Shanghai GM, which currently sees its inventory cost fall by 22%. In the coming years, GM will increase its investments in China instead of having any reduction. In addition to a schedule of launching over 20 new models between 2009 and 2011, Shanghai GM will also improve its product lineup, in a direction toward European and American technology, Ding explained.

Despite a spreading pessimism outside, Ding was confident of the recovery of the auto market. “The auto market in China is likely to recover in the second half of 2009 as a result that 4-trillion-yuan stimulus package to boost domestic demand takes effect, he said.