China Gold for GM

While most of us fixate upon GM gaining or losing market share here in the U.S., the company's success in China is a huge story that deserves more attention. Especially when you look at the latest report. In August, GM doubled sales in the country, selling more than 152,000. And this year GM's China sales are up 49% with 1.11 million vehicles sold.

China's National Flag
China's National Flag

Those numbers explain why China is crucial to GM's future.

Remember when Washington was steering GM's re-structuring before and then during bankruptcy?

The Auto Task Forcepushed GM to sell Saturn, HUMMER and Saab, while cutting Pontiac.

But the feds left GM's China business alone.

While Washington pushed GM to cut its losses with Opel in Europe, it did little to change what GM is doing in China. As one consultant who worked with the Task Force said to me, GMs position and potential in China is enormous.

I know that's of little comfort to the tens of thousands GM workers here in the U.S. who lost their job as the company cut plants, restructured the corporate staff, and saw the mighty GM shrink in size. But if you're a GM fan rooting for the company to come back stronger than ever, you oughtta be thankful GM is doing so well in China. In essence, the money GM makes in China will fund much of what the auto maker want to do in the future.

You think GM would be able to raise billions in the capital market if it had little or presence in China? Maybe. But being #1 in a market that will likely pass the U.S. In sales this year, will make it a LOT easier to borrow when GM goes public next year. China gives GM the global scale it will need in an increasingly competitive auto market.

So as neighbors and others wring their hands about GM being up or down a bit in U.S. sales, just remember this: GM's Chinese (good) fortune will smooth out bumps in the road for the auto maker.

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