After acquiring lesser car brands, Chinese automakers say that they are not ruling out the possibility of acquiring American car brand General Motors.

The plan has been brewing since the recession hit late last year. Car manufacturing giants in China like Shanghai Automotive Industry Corporation and Dongfeng Motor Corporation are actually capable of buying assets from General Motors and other American brands.

However, only after GM makes its assets public can Chinese automakers have their hands on this major opportunity.

GM’s Hummer brand is now being sold to Sichuan Tengzhong Heavy Industrial Machinery. China’s first independent car company, Geely, is also in the final stages of buying Ford’s Swedish car brand Volvo. Ford also sold its Jaguar and Land Rover division last year but it was India’s Tata Motors that had the opportunity to buy it first.

Such acquisition moves go perfectly with China’s plans of accessing foreign carmaking technology because Chinese cars, at least as of now, don’t quite get serious attention abroad. Although Chinese automakers can produce foreign brands inland, the better solution seems to be in buying foreign brands that are in deep trouble due to the recession–if their joint venture partners allow it. The move gives Chinese makers instant access to the international market with accepted brands, not to mention proven technology.

The opportunity to acquire just went up with the financial meltdown which struck mostly Western companies. But domestic opportunities are also hard to ignore now, as China has surpassed the US as the world’s largest market for car and light truck sales.

Indeed, the Chinese government was right to give domestic automakers the freedom to access the world market as well as the opportunity to purchase international brands. But with more than 100 automakers in China already, the government is now encouraging them to consolidate instead. (Duane D)

Source: CNN