General Motors Co (GM), profitable for 13 consecutive quarters, is planning to invest about US$16 billion on US factories and facilities through 2016, more than it will spend in China, the company said.
“The US$11 billion in capital that will be spent in China by 2016 is coming out of our joint ventures rather than Detroit and is far less than the approximately US$16 billion in capital GM will invest in the US over that time,” GM vice president of public policy Selim Bingol said in a letter published in the Wall Street Journal.
GM disclosed the US investment figure after announcing the US$11 billion investment for its joint ventures in China last month in Shanghai. That was an increase from a 2011 outline to spend US$7 billion through 2015.
GM through its joint ventures sold 2.84 million vehicles in China — its biggest market — last year and wants to boost that to 5 million by 2015.
The Journal last week ran a commentary on its op-ed page titled “Welcome to General Tso’s Motors,” which said that China “is disproportionately benefiting” from the 2009 US-backed bankruptcy reorganization of Detroit-based GM.
The Journal’s editorial page has previously criticized the bailout.
GM “was in China long before the economic meltdown of 2008-2009, and not one dollar of US taxpayer rescue money was spent on our operations there,” Bingol said in the letter. “Our Chinese joint ventures are self-funding, meaning we require funds spent there to be generated there.”
The US spending plan ties in with GM chief executive officer Dan Akerson’s strategy to boost operating margins to 10 percent in North America by mid-decade from 7.4 percent in the past three years.
GM is introducing about 20 new or refreshed vehicles in the US, part of a plan to increase profits and rebound from last year’s 88-year low in US market share.
“Our investments in the US and China reflect our determination to remain No. 1 in the world’s top two markets,” GM spokesman Greg Martin said on Sunday.
GM has said it invested US$8.5 billion in the US since emerging from bankruptcy, including efforts to prepare for production for more fuel-efficient engines and vehicles.
GM has 31 facilities in the US, Martin said. That includes 12 assembly plants, according to the company’s Web site. With its China investment, GM is increasing its number of assembly plants to 17 assembly plants, GM China president Bob Socia said last month. The total number of facilities in China will be 30 in 2016, the automaker said.
The US firm, which is the largest foreign automaker in China, reported accelerated sales growth last month, while Japan’s Toyota Motor Corp saw its deliveries slump extend in the world’s biggest car market.
The carmaker’s sales climbed 15 percent to 261,870 units last month, after a 13 percent increase the preceding month, figures released yesterday showed. Toyota reported sales fell 6.5 percent to 76,400 units, the ninth drop in 10 months.
Overall, GM is “cautiously optimistic” that sales in China may reach 3 million units this year, Socia said last month. The company sold 2.84 million vehicles in China last year and targets to sell 5 million in the world’s biggest auto market by 2015.