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China automakers no white knights for U.S. giants

By Fang Yan

SHANGHAI, July 14 (Reuters) - China's fledgling car makers see little to gain from buying assets or equity stakes in General Motors and Ford, dismissing speculation they could be white knights for the faltering U.S. giants.

At first glance, it appears an appealing match.

Chinese automakers are eager to enter the North American market, the world's largest, and the woes at General Motors Corp and Ford Motor Co are deepening. GM shares are at a 54-year low, and Ford was forced by slumping sales to abandon its profit goal for 2009.

But Chinese automakers, from top player SAIC Motor Corp (600104.SS: Quote, Profile, Research, Stock Buzz) to up-and-coming Chery Automobile Co, responded coolly when GM shopped around its gas-guzzling Hummer SUV unit and Ford reviewed the prospects for Swedish premium brand, Volvo.

"We haven't had any discussions at the management level to consider either Volvo or Hummer," said Jin Yibo, a spokesman for Chery, a fast-growing maker of inexpensive cars.

"We are moving gradually to enter the higher-end segment ourselves. We are also talking with Fiat and others about making premium models," said Jin.

Chery, which made its name with the QQ, China's best-selling sub-compact car, has already signed an agreement for a joint venture with Italy's Fiat SpA (FIA.MI: Quote, Profile, Research, Stock Buzz) to make Alfa Romeos.

Chery was seen as a potential contender for Volvo due in part to its similarity to India's Tata Motor (TAMO.BO: Quote, Profile, Research, Stock Buzz), the maker of the Nano, the world's cheapest car. Tata completed the $2.3 billion purchase of the Jaguar and Land Rover brands from Ford last month.

But just as analysts doubted whether Tata could succeed with those premium brands where Ford failed, many also question if Chinese automakers could engineer a turnaround at Volvo or Hummer. Limited international exposure, and lack of technical and managerial savvy could weigh against Chery and other Chinese automakers, some analysts argue.

"Volvo and Hummer are still seen by many as solid and prestigious brands even though they are not making much money. But will that perception still hold if they are China-made?" asked Matthew Kong, associate director in Fitch's Asia-Pacific corporates team.

CHINA INC

Speculation about prospective Chinese interest in U.S. auto assets has been fanned by the growing strength of the world's fourth-largest economy and China Inc's voracious appetite for global assets, from oil fields and iron mines to stakes in financial powerhouses such as Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz).

This could be a good opportunity for Chinese automakers to buy into Detroit giants in dire need of a cash injection, with their shares at multi-year lows, some analysts said, although a major stake would be out of the question for political reasons.

But with oil prices hitting record highs and U.S. auto sales at 15-year lows, analysts and Chinese industry executives saw little benefit from purchasing small equity stakes.

"Most Chinese car makers are already making foreign auto brands in partnership with global partners. A stake in GM will not help them sell the models in U.S. market," said Zhang Xin, a senior industry analyst with Guotai Junan Securities.

More here: http://www.reuters.com/article/marketsNews/idESSHA6861520080714?rpc=44&sp=true
 

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ah yes... let's sell off more of the corporation to China

I saw that budweiser just got bought out by some Euro corporation for heaven sakes!

That is the new American way right? Don't stay the course and fight it out, just sell of chunks of your company to the higest bidder.
 

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We are know as the country of greedy execs. Those execs selling out to China, India and any other highest bidder is no suprise.
 

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All the major automakers in China and India have been approached about this, and all have flatly rejected any notion of buying an equity stake in Ford or GM.

For Ford, it's because they'd need to contend with Captain Kirk and the Ford Family, who would be extremely hostile to any attempts to influence product development.

For GM, it's a little more grim. The only thing of value that GM has to them is the brands through which to sell their products, and in their opinion, they would rather wait for bankruptcy to snatch up the brands for pennies, than to overpay now.
 

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Im supprised the UAE hasnt thrown a bid in on the mess.
They have all of the money anyway. They would almost be paying themselves!
 

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...and why do foreigners have the money? Yup, because of us, it is not rocket science!
 

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"...and why do foreigners have the money? Yup, because of us, it is not rocket science!" yep, autos, oil and gas, consumer electronics, office eqpt, all cameras, all furniture, now, food.......
What is it we have to sell to these protectionists outside of fast food partnerships, powerplants, planes (fast being caught by airbus with its subsidies), drugs and software (which is easily pirated) and entertainment (ditto last comment).
 

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The Budweiser deal makes me sick to my stomach.

Seeing GM, Chrysler, and Ford get sold to the Chinese or any other country would finally drive me to the edge of never considering a new automobile again. I'll keep driving old used cars until I can't afford to fix them anymore.
 

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We don't have money because some of y'all playas live beyond your means. Y'all spend like it is 1999. Taking credits up to your neck in order to buy a 08 Chevy Silverado crewcab 2500 and giving it a 12" lift with monster rims and tires. Do you really need that truck to commute to work everyday?
 

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Ugh, white knights they are NOT! Would be the worse thing to happen to GM or Ford....
 

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You're right.

It's an immoral travesty for someone OTHER than an American to have money...
I'd rather China be prosperous than having them trying to invade us to get wheat for their starving masses.

The best way to defend your own country is to ensure the rest of the world is fed and happy.
 

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If you're gonna ride, don't ride the white horse.
 
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