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GM says China operation unaffected by bankruptcy

GM says China operation unaffected by bankruptcy
AP
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First Published: Tue, Jun 02 2009. 09 41 AM IST
Updated: Tue, Jun 02 2009. 09 41 AM IST
Beijing: General Motors Corp.’s fast-growing China operation will be unaffected by GM’s bankruptcy and plans to open a new factory within five years even as the automaker closes US facilities, the unit’s president said Tuesday.
GM China is sticking with a five-year plan that calls for doubling annual sales to 2 million vehicles and rolling out 30 new models, president Kevin Wale told reporters. He said the China operation is not covered by GM’s petition Monday for court protection from its creditors and the unit’s business plans are fully financed.
“Our operations are separate, they are profitable, they are well-funded, and we generate our own funds for future investment,” Wale said. “We do not see any change to our growth activities.”
GM is one of the biggest automakers in China, where strong sales have been a rare bright spot for global automakers that have seen demand elsewhere plummet. China’s monthly sales have surpassed those of the United States so far this year.
GM China sold 670,000 vehicles in the first five months of the year, a 33% increase over the same period of 2008, Wale said. He said May sales of 156,000 units was a 75% increase from the same month a year earlier.
Demand is so strong that GM China expects to have to add a factory within five years but has made no decisions about a location or other details, Wale said.
Detroit-based GM sought court protection from its creditors on Monday under Chapter 11 of the US bankruptcy code. The company said it hopes to emerge from reorganization in 60 to 90 days as a profitable entity with fewer employees, factories and dealers.
Wale also said that he expected an announcement “imminently” on GM’s Hummer brand, but did not know the outcome of the decision.
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First Published: Tue, Jun 02 2009. 09 41 AM IST
More Topics: GM | China | Auto | Sales | Bankruptcy |