While the Chinese economy appears to be slowing, General Motors Company (NYSE:GM) sales in the nation are up higher than what the company sells in the United States. Sales increased by 10.6% during this year’s first half, representing about 1.6 million vehicles. In the same period, the company sold 1.4 million vehicles in the U.S.
The Chinese sales make General Motors Company (NYSE:GM) the no. 2 highest-selling car company in China, and well-positioned to take advantage of it when the nation’s economy really starts to surge. There is a tremendous amount of opportunity in China. The nation has about 1 billion people more than there are living in the U.S., and its economy that has a ton of room to grow.
General Motors Company (NYSE:GM) looks to compete in car division
While General Motors Company (NYSE:GM) is a leader in truck models, it has lagged in the car division. The company’s car models appear to be of the highest quality they have ever been, however. If the firm is able to compete in the car division which has lower base costs, it will be set to make amazing profits in the years ahead. A large number of the company’s stock shares are owned by governments, however, and this poses a risk if the governments pull their shares. The U.S. Treasury, for example, is set to sell about 16% of its 500.1 million shares.
Ford’s stake in China
As Ford Motor Company (NYSE:F) looks to increase its stake in the Chinese economy, the firm’s gains there will outpace the industry this year. Ford Motor Company (NYSE:F) sales increased by about 48% in the first five months of this year. A large portion of the sales are for vehicles like the EcoSport, the Kuga sport-utility vehicle and the Focus. As with General Motors Company (NYSE:GM) investors, those who put money in Ford could see substantial profits in the years ahead from sales to the nation.
Ford Motor Company (NYSE:F) becomes even more attractive when you consider that it has doubled its dividend and received an investment-grade credit rating from major credit agencies. That means that the company can more easily secure funds for future projects. Ford Motor Company (NYSE:F) is also making its operations more efficient, focusing on nine platforms instead of the 27 platforms that it had in 2007. This focus will help the company to meet global demand will reducing its costs through improved economies of scale.
Toyota improving Chinese relations
As Toyota Motor Corporation (ADR) (NYSE:TM) struggles with a backlash from China, it is experiencing positive news from one area of the nation. Toyota Motor Corporation (ADR) (NYSE:TM)’s Chinese sales fell after a territorial conflict between Tokyo and Beijing last September. Toyota stated it will focus its sales on Southern China, however, which has historically low anti-Japanese sentiment. In fact, a Toyota executive told Reuters earlier this month that southern sales have recovered to their pre-September level.