Although GM and VW have publicly wished the new venture, called SAIC Motor, their best wishes and have made it clear that they knew the Chinese would move out on their own at some point, investors have to question whether the Chinese market is about to become substantially less attractive for the troubled U.S. company.
Even though the Chinese car market is likely to grow at a rapid pace for several more years, as the local manufacturers set up their own independent operations the pie is going to be sliced into several more pieces.
According to the Chinese Association of Automobile Manufacturers, the country is expected to product six million cars, trucks and buses, in 2005, a 20% increase over 2004.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also the president of Switchboard.com when it was the 10th most visited site on the internet, according to MediaMetrix. He can be reached at firstname.lastname@example.org.