General Motors Company (GM): Automakers Tale in China

The company is doing ‘everything possible’ to regain its share in the Chinese market. Apart from localizing its production, the company is also setting up Lexus manufacturing facilities in China to benefit from rising SUV demand in the region. Lexus sold 64,000 cars in China last year, accounting for about 7.6% of Toyota Motor Corporation (ADR) (NYSE:TM)’s overall sales in the country.

In contrast, BMW’s sales in China jumped about 40% to roughly 326,000 vehicles in 2012. Lexus has lagged behind the German brands, which dominate the Chinese premium market, in part because of its late entry and limited distribution network. Toyota Motor Corporation (ADR) (NYSE:TM) began selling Lexus vehicles in 2005, more than 15 years after Audi built its first car there. Localizing production will help Toyota to compete on equal grounds with its German peers.

Final word

China is a highly regarded auto market in the world–and yet a lot of growth is still to come. In this situation, all players are expected to benefit. Where Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have expanded their product offerings to take advantage of political tension between China and Japan, players like Toyota Motor Corporation (ADR) (NYSE:TM) remain committed to regaining their market shares in China, whatever it may take.

Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

The article Automakers Tale in China originally appeared on Fool.com.

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