GM (GM) May Accelerate Presence in China Following New Duties
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With China looking to impose heftier duties on auto imports, General Motors (NYSE: GM) might shift gears and start accelerating plans for localizing more production in China. Earlier in the week, it was reported that GM would face the heftiest duties on auto imports, at 12.9 percent.
But the move might not be as drastic as originally hyped. According to one JPMorgan analyst, only 1.3 percent of the 2.43 million vehicles sold in China last year were imported.
The analyst also said that the duties will have just a modest impact on GM, because most of the vehicles imported a low-volume models like Bucks and Cadillacs.
Still, building a factory for those purposes might be worthwhile to GM. Currently, the duty is on models with engine sizes of 2.5-liters or better, but should China decide to broaden the duty to smaller engines or different models, or increase the rate, its better to already be positioned rather than trying to fix a problem that offered plenty of foresight.
GM is up 1.6 percent early Thursday.
With China looking to impose heftier duties on auto imports, General Motors (NYSE: GM) might shift gears and start accelerating plans for localizing more production in China. Earlier in the week, it was reported that GM would face the heftiest duties on auto imports, at 12.9 percent.
But the move might not be as drastic as originally hyped. According to one JPMorgan analyst, only 1.3 percent of the 2.43 million vehicles sold in China last year were imported.
The analyst also said that the duties will have just a modest impact on GM, because most of the vehicles imported a low-volume models like Bucks and Cadillacs.
Still, building a factory for those purposes might be worthwhile to GM. Currently, the duty is on models with engine sizes of 2.5-liters or better, but should China decide to broaden the duty to smaller engines or different models, or increase the rate, its better to already be positioned rather than trying to fix a problem that offered plenty of foresight.
GM is up 1.6 percent early Thursday.
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