GM Denies Plan To Sell Stakes In China Venture

Shanghai, February 13, 2009: (Gasgoo.com) General Motors Corp has no plan to sell stakes in its China joint venture with SAIC Motor Corp to SAIC, GM China spokesman Henry Wong told the media on Friday, Reuters reported.

Yesterday, GM was reported to have held talks with SAIC recently to sell some of its stake in their 50-50 joint venture that builds and sells Buick, Cadillac and Chevrolet models in China, but the report was soon denied by the automaker.

The Reuters report said such a move would at least help insulate it against criticism that it was using US taxpayer funds to subsidize business overseas.

GM has to submit a new restructuring plan by next Tuesday to the U.S. government detailing the progress it has made in cutting costs and shoring up its balance sheet, while showing it can become viable under a $13.4 billion government bailout.

Industry analysts say it's almost impossible for GM to do that as China has a great growth potential. "It won't look good for SAIC if its partner is pulling back," said Guotai Junan Securities analyst Zhang Xin.

"GM's partnership in China has been extremely successful and boasts superior sales results, thus GM won't sell its assets easily," said Wang Liusheng, an auto analyst at China Merchants Securities.

General Motors posted a 6% growth in its China vehicle sales to 1.09 million vehicles in 2008, the lowest growth rate in at least six years, down from the 19% growth in 2007. Sales at Shanghai GM fell 7.03 percent to 445,709 units in 2008 after it had topped the sales list of Chinese carmakers for three consecutive years from 2005 through 2007.

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