Any potential investment by SAIC Motor Corporation into GM as it looks to launch its IPO could create a global automotive powerhouse says one US analyst.
Rumours been rife this week that SAIC – GM’s Chinese partner – is waiting in the wings to take a potential stake in the US manufacturer – while the US Treasury inched the door open yesterday (21 September) by noting it expected potential investors “across multiple geographies” to come forward.
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Comments apparently made yesterday by SAIC Motor Corporation chairman Hu Maoyuan, that it could consider taking a stake in GM have provoked widespread speculation with reports quoting him as saying: “GM is our important strategic partner. We are not clear about the details of its IPO. We will make the right decision once we know details.”
And GM’s existing deep relationship with SAIC might make it a particularly attractive partner for the US market.
“The Chinese have been wanting to come into the US for a very long time, so I see it as a positive for both companies,” IHS Automotive US-based analyst Rebecca Lindland told just-auto.
“When you combine the two [entities] of North America and China, you get almost a third of the global market.”
And despite the potential political challenges of China coming into the arena, Lindland cited the previous entries of Japanese and Korean companies into the US as setting a precedent.
“We are in a capitalist market and we are going to have foreign investment – it is unwise to see China as a threat,” she said. “We are better off playing with them than trying to play without them.”
Lindland added there was some sense of protecting American borders “literally and figuratively,” but noted there was a lot of discussion in the US concerning how to open those frontiers.
Any SAIC/GM tie up could see the Chinese automaker’s brands enter the US and although Lindland said there would be “a lot of challenges” surrounding quality and reliability, the process could take place more quickly than the “decades” it took Hyundai and Kia for example.
The analyst also underpinned new GM CEO Dan Akerson’s recent comments that the US$50bn taxpayer-funded bailout could be repaid within “a couple of years.”
“It all depends on the IPO if it is successful,” she said. “You don’t want to flood the market with those shares – and you have to say the probability of the US public getting paid back is far greater than a year ago.”
