General Motors Co.
) share price declined 0.3% to close at $33.70 on Aug 12 after
Chinese anti-monopoly regulators reportedly contacted the Chinese
joint venture of the company as part of an ongoing investigation in
the industry. Chinese authorities have launched a series of
anti-monopoly investigations on some of the global automakers and
technology suppliers to regulate prices and ensure value for
The joint venture between General Motors and the state-owned
Shanghai Automotive Industries Corp. - the Shanghai General Motors
- sells vehicles under Buick, Cadillac and Chevrolet brands.
General Motors is actively cooperating with the National
Development and Reform Commission's (NDRC) price supervision and
anti-monopoly bureau and also assisted in its investigation and
research in the automotive industry.
Following the NDRC investigation, Audi, Bayerische Motoren Werke
AG, Daimler AG's (
) Mercedes-Benz, Jaguar Land Rover, Chrysler, Toyota Motor Corp. (
) and Honda Motor Co. (
) have either lowered the price of the vehicles or spare parts.
Shanghai General Motors focuses on supplying high-quality products
and services which conform to the national regulations and
policies. The automaker stated that the prices of vehicles and
components in China are on par with that in the U.S. or Europe. All
the components required for a car, if purchased separately in
China, would cost about 265% to 330% of the price of a whole
vehicle. Meanwhile, the same would cost 300% of the vehicle price
in the American and European markets.
Presently, the company's crucial market is China followed by the
U.S., Brazil, Germany, U.K., Canada and Italy. The company focuses
on the emerging markets to recoup its global sales by increasing
capacity investment to meet the growing demand. The company will be
launching 60 new or refreshed vehicles between 2014 and 2018 and 11
new utility vehicles in China in the next 5 years and expects sales
in the Chinese market to grow 8% to 24 million vehicles in 2014.
General Motors currently carries a Zacks Rank #3 (Hold).
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