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GM (GM) forecasts that the growth in China's car market this year will fall to 7-10% from 30% in...

GM (GM) forecasts that the growth in China's car market this year will fall to 7-10% from 30% in 2010 and 50% in 2009, although CEO Daniel Akerson indicates this is a good thing. "You can't have totally unbridled growth in a country evolving as quickly as China," Akerson says. Surely that spinning sound is not coming from GM car wheels.
Comments (4)
  • Daniel M. Harrison
    , contributor
    Comments (139) | Send Message
     
    This is a great illustration of one of the biggest problems about investing in China, and emerging markets more generally: the growth rates are so erratic. From an operational standpoint, this means that while you might project 25% CAGR over the next 15 years, every year, the reality is that 2 years ago was 50%, which fell to 30% growth, which fell to 10% growth, which jumped to 50% again for 5 years and then slumped and spiked thereafter. That makes managing your cashflow enormously hard. For firms like GM, which rely heavily on consistency in the numbers, this task will only get more challenging as different markets evolve and open up over the next 30 years.
    30 Oct 2011, 08:52 AM Reply Like
  • atrios28
    , contributor
    Comments (54) | Send Message
     
    The GM executive is right even if it's for the wrong reasons. Since I don't know the enormous and vexing social problems of China -- a country with 167 Los Angeles-sized cities. From an ecological standpoint 1 billion more internal-combustion engines is so unimaginable & the stuff of science fiction. It won't happen because it takes 7 gallons of crude oil to make each tire. Roads take immense quantities of heavy tar: which they exhale to the chagrin of lungs everywhere.

     

    I suspect that China's political leaders - for all of their faults - continue to pursue sane policies of mass-transit (they've built the equivalent of super-trains between L.A. -to- SF Portland -to- Seattle and Chicago -to- New York. Theirs is the largest solar industry in the world. And unlike Obama Cameron et al who shovel money at oil companies & nuclear power which no insurance cos. will ever cover, China subsidizes solar, wind & geothermal and many of the advances have Chinese patents: including ultrathin silver cells that harness infrared after the sun has set and turn it into electricity. We have to change, starting with our way of thinking. Socialism, Capitalism are completely irrelevant which is why politicians love to use such terms: they stifle critical thinking. Like "drugs" ... We have a Drug War but I just went to the Drug Store. It's insanity: and we are lying to ourselves even while the bilge pumps give out.

     

    China, India....these are not only the future dynamos but they have shown far more courage than our bought & payed boneheaded politics
    30 Oct 2011, 11:35 AM Reply Like
  • RJKRJK
    , contributor
    Comments (128) | Send Message
     
    I am always amused by people who try to put up the Chinese or the Indians as some sort of paragon the US should emulate. Does the US have problems,undeniably. But to put up as examples of good stewardship, countries where people die from starvation (by the thousands if not the millions), the air is nearly un-breathable in many large cities, and freedom is considered a quaint idea, is lunacy.
    30 Oct 2011, 05:46 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
     
    The growth rate is falling but the base against which it is measured is growing. To me it sounds like unit sales will continue to be large and possibly grow.
    30 Oct 2011, 08:24 PM Reply Like
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