China Still The Holy Grail For GM, And The Best Place For Its IPO

Ford’s (F) sales may have passed GM’s in the US in February, but GM is still well ahead of its rivals in China.

GM sold 174,306 cars on the mainland last month between its own vehicles and those sold with joint venture partners. The is a 51% increase over the same period last year.

GM’s lead over Ford and Toyota (TM) is China is huge. Ford sold only 18,193 cars in the People’s Republic in February and Toyota’s total was 45,000 units.

GM’s China dominance is because it was in the market early and picked joint venture partners who have dominant positions in the market, especially SAIC,  considered by most analysts to be the most powerful local car company. As GM looks for ways to return to consistent profitability, the Chinese market may be more important than the company’s traditional strongholds in the US and Europe. GM said it would triple its planned investment in Opel to hasten the unit’s turnaround.

GM will probably have an IPO this year in the hope of paying taxpayers back some of the $50 billion that the federal government invested in the car firm. The IPO would be more appropriately listed on the Shanghai exchange than the NYSE.

Douglas A. McIntyre