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GM's China outfit sees no major fallout in US move

THE resignation of General Motors Corp CEO Rick Wagoner will not affect the company's strategy in China, the Chinese division of the struggling US auto maker said yesterday.

Analysts agreed that the departure of Wagoner, who placed high importance on the Chinese market, will have limited impact here. But some added that GM's overall competitiveness in the world's second-largest auto market faces huge challenges because of the company's financial troubles at home.

"GM's investment plan and operations in China are quite independent," an official from GM China said yesterday. "So the reshuffle in the North American market will not change GM's operation in China."

GM's local venture with Shanghai Automotive Industry Corp also issued a notice saying the car maker will continue business as usual.

Analysts said the impact on the Chinese market will be limited as most of the company's restructuring plan will focus on job cuts and plants closings in the United States market.

Zhang Xin, an analyst at Guotai Jun'an Securities Co Ltd, noted that the impact of the restructuring depends on whether previous strategies continue under a new leader.

"But China is GM's most profitable market. If they give up on China, it would be more difficult to survive," he said.

Other analysts pointed to market speculation about whether the debt-ridden car maker will have the financial capability to support its expansion in China.

Li Chunbo, an analyst at Citic Securities Co Ltd, noted that GM is at a crucial moment in its history and may no longer be able to exploit China's market potential.

"The performance struggle in the United States has hurt GM's brand image and raised concerns over after-sale service in China," he said. "There are new questions arising about whether GM can continue to support China operations such as the introduction of new products."

GM's China sales rose 6 percent to 1.09 million vehicles last year, compared with an 11 percent decline in global sales. The company sold 111,282 units in China in January, a rise of 3.3 percent.


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