Chinese Automakers May Buy GM and Chrysler

[argatoga]

http://www.thetruthaboutcars.com/bre...-and-chrysler/

Chinese Automakers May Buy GM and Chrysler
By Bertel Schmitt
November 18, 2008 - 8,769 views
Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today. [A National Enquirer the paper is not. It is one of China's leading business newspapers, with a daily readership over three million.] The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?


A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.

21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.”

Deloitte & Touche sees a trend: “Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global carmakers such as GM and Chrysler.”

The Chinese appear to have bigger plans than an accounting firm can imagine. 21st Century Business Herald acts and writes as if its already a done deal, and the beginning of more to come. “In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng’s possible acquisition of troubled GM or Chrysler.”

Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China’s largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005.

Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China’s Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.

[THGL]

I don't think Uncle Sam would let that happen (Uncle Obama, on the other hand...).

[BlaRo]

At this point it'd probably be for the best...and I'm pretty sure the Chinese would be better stewards of the brand than the current management themselves.

And before anybody else says it first, I doubt the Chinese are going to sell us cars with their own crash-test standards:

[C53A_4G63T]

I find this fucking hilarious.

But from the Chinese stand point, this is a massive opertunity to rake in tons of cash using existing GM tehnology. Ditching all the shitty small american cars, updating their own with the GM's safety technology, and selling them here in GM dealerships.

[CrazyRussian540]

Please God no. I'd rather see GM go bankrupt than go red.

(no offense to any of our Chinese members or anything)

[Aston Martin]

Who the fuck wants Chrysler? They're worthless.

[Spectre]

Buying GM ought to set them back by about another decade in the US market....

[Dogbert]

Originally Posted by Aston Martin

Who the fuck wants Chrysler?

You're going to lose the "BUY AMURICAN" market if this goes through, which is pretty much the only thing keeping these companies floating right now. Look at what's happening with A-B and InBev right now for a good example of this phenomenon.

I didn't think the Big Three could become any more useless... until I heard that the Chinese want to buy them.

[jetsetter]

It's not going to happen. I would also like to add that thetruthaboutcars.com is a terrible website.

[Leonidae]

well, the chinese wouldn't need to clone GM/Chrysler cars after that.. and they might even become bit more safe after they realize that cars should be made out of metal and plastic instead of paper and bamboo sticks..

[Spectre]

Originally Posted by jetsetter

It's not going to happen. I would also like to add that thetruthaboutcars.com is a terrible website.

TTAC isn't a great website, no. But they are correct, that Chinese paper did report that story.

Thing is, people were saying the same thing about the Chinese buying Rover and the Indians buying Jaguar.

Unless GM declares Chapter 11, they're looking at Chinese ownership.

[jetsetter]

Unless GM declares Chapter 11, they're looking at Chinese ownership.

I still doubt it. Perhaps GM will sell Buick to some Chinese corporation but GM whole, I don't think so.

[Spectre]

Um, have you looked at GM's market capitalization?

APPLE COMPUTERS could buy GM (current price tag, under $2B) out of cash on hand and have $25B left over.

[jetsetter]

Originally Posted by Spectre

Um, have you looked at GM's market capitalization?

APPLE COMPUTERS could buy GM (current price tag, under $2B) out of cash on hand and have $25B left over.

I'm not entirely sure the deal would be approved. With Obama in the house it will be all about "helping". That means governmental aid.

[icedude]

I find this very weird, buying american is stupid, they are going to loose so much money buying GM and chrysler

no offense to any american members but american cars are rubbish, ex.

chrysler 300, dodge charger, challenger and magnum are all based on a 13 year old MB E class, Chrysler Crossfire is based on a 11 year old MB SLK and "it looks like a dog making nr 2" quoting Jezza

and they are made cheaply, and 8.4 liter V10 producing only 600 hp

[jetsetter]

Originally Posted by icedude

I find this very weird, buying american is stupid, they are going to loose so much money buying GM and chrysler

no offense to any american members but american cars are rubbish, ex.

chrysler 300, dodge charger, challenger and magnum are all based on a 13 year old MB E class, Chrysler Crossfire is based on a 11 year old MB SLK and "it looks like a dog making nr 2" quoting Jezza

and they are made cheaply, and 8.4 liter V10 producing only 600 hp

I suggest you stop getting your info/opinions from watching TopGear. An attitude like yours will not get you far here.

[Crazyjeeper]

Originally Posted by icedude

I find this very weird, buying american is stupid, they are going to loose so much money buying GM and chrysler

no offense to any american members but american cars are rubbish, ex.

chrysler 300, dodge charger, challenger and magnum are all based on a 13 year old MB E class, Chrysler Crossfire is based on a 11 year old MB SLK and "it looks like a dog making nr 2" quoting Jezza

and they are made cheaply, and 8.4 liter V10 producing only 600 hp

Originally Posted by jetsetter

I suggest you stop getting your info/opinions from watching TopGear. An attitude like yours will not get you far here.

+1

[Spectre]

Originally Posted by jetsetter

I'm not entirely sure the deal would be approved. With Obama in the house it will be all about "helping". That means governmental aid.

Even with a bailout, GM's MarCap won't be going up much. And on what grounds would a hostile takeover by SAIC be repudiated? GM isn't a critical defense contractor, nor does SAIC sell in the US so there's no monopoly grounds.

[icedude]

Originally Posted by jetsetter

I suggest you stop getting your info/opinions from watching TopGear. An attitude like yours will not get you far here.

no offense but I suggest you stop building cars

[jetsetter]

Originally Posted by icedude

no offense but I suggest you stop building cars

Oooooooooooo............