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GM China may export vehicles to US market

GENERAL Motors Corp is planning to export Chinese-made vehicles to the United States as part of its restructuring plan to improve cost efficiency, sources said yesterday.

A GM spokesman from China declined to comment after media reports said the struggling car maker would begin selling Chinese-made vehicles to the US by 2011 and up to 50,000 units annually by 2014.

Most of those models would be small cars similar to the Chevrolet Spark, Shanghai Securities News reported yesterday.

If it's true, GM's two ventures would be among the first Chinese car makers to export passenger cars to the US, where higher safety and emission standards deterred previous attempts by other auto makers.

"This is a suggestion as part of the Viability Plan, but it hasn't been nailed down yet," the source said. "All of the initiatives are to save costs and give GM a cost competitive advantage."

GM, partners with Shanghai Automotive Industry Corp, owns a passenger car venture with annual production capacity of 760,000 units a year. It also produces minivans through SAIC-GM-Wuling in southern China.

"Besides cost improvements, the move may give GM some leverage in its negotiations with the United Auto Workers union as the auto maker tries to reduce high labor costs," said Xu Caihua, an analyst from Guodu Securities Co Ltd. "It may also mean China would be more than just a sales generator for GM."

GM's chief executive officer, Fritz Henderson said on Monday that it is more probable that the car maker needs to file for bankruptcy, just weeks before it meets the June 1 deadline to reach an agreement with creditors in a restructuring plan.

The car maker, which is vying for additional US government aid, has planned to wipe out US$44 billion in debt, cut 21,000 workers and unload the Pontiac brand to slash costs and stay afloat.

The Chinese market remained a source of good news for GM thanks to the rebound of the overall market and new models such as the Buick Regal and Chevrolet Cruze.

GM said earlier that it plans to double sales to 2 million units within five years and may build another plant to help meet the target.

Sales in China soared 50 percent year on year in April to a monthly record of 151,084 vehicles, GM said.


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