U.S. Companies Are Smart to Dig for China's Riches
China, which has long been churning out low-cost goods for U.S. consumption, is increasingly cranking up to serve another giant consumer market: its own.
...
General Motors Corp., for instance, recently reported earning more than $500 million, or about 40% of its worldwide automotive profit, last year in China. It sold about 400,000 cars and trucks to a rising class of Chinese with money in their pockets.
The world's largest automaker, which has $2 billion invested in China, is expanding two of its four factories there and introducing auto financing through its GMAC division.
It is bringing the Cadillac into the country and also offering a slate of low-priced vehicles, attempting to entice Chinese consumers with a wide range of styles and prices. Such overtures are reminiscent of the way GM reached out to first-time car buyers in 1920s America.
Even though less than 5% of China's 1.3 billion people can afford any kind of car today, GM Chief Executive Rick Wagoner predicts that the nation will surpass Japan as the world's second-largest car market within five years. In his lifetime, the 51-year-old Wagoner figures, China may even emerge as a larger car market than the U.S.
China, he told Bloomberg News this month, "is feeling like the great Gold Rush."
latimes.com |
