Wednesday, April 8, 2009

Something's Gotta Give

Yesterday's post discussed the fact that China's auto policy calls for an increase in market share of domestic brands from 25 percent to 40 percent in three years. The policy also calls for 10 percent annual growth in auto sales over the next three years.

Today, this Reuters story says that GM plans to double its sales in China within five years.

Some rough back-of-the envelope math tells us that, if both the 10 percent growth figure and the 15 percent increase in domestic brand market share figure are achieved, then three years hence, foreign automakers will collectively be selling approximately the same number of vehicles annually as they do now.

Combine this with GM's ambitious plans, and it would seem that someone should prepare to be disappointed -- either that or one or more of the other foreign automakers will
basically have to cut and run.

I'm betting it won't be Volkswagen.

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