Chinese authorities are poised to provide GM (NYSE:GM) and its partner SAIC Motor Company with the go-ahead to build a new factory in China.
This new factory will produce 300,000 new cars a year, and is expected to increase GM’s output in China by 15%. The factory will be built in Wuhan, a city in Central China. The new factory will ease the strain on other GM factories that are building beyond their capacity.
General Motors is the biggest automaker in the world’s biggest market. General Motors was a popular brand amongst China’s political elite even in the 1970s, when the rest of the population went without cars. GM’s sales in China grew 28% in 2010, and China remains GM’s most lucrative market.
General Motors Analyst Call
This news comes after Sterne Agee said European results and expected restructuring charges present near-term risk to shares. The firm rates General Motors a Buy and would wait for a better entry point following the February 16 earnings.
Here’s how GM shares are reacting to the news:
General Motors Corporation (NYSE:GM): GM shares recently traded at $25.48, down $0.26, or 1.01%. They have traded in a 52-week range of $19.00 to $36.84. Volume today was 2,564,980 shares versus a 3-month average volume of 11,250,600 shares. The company’s trailing P/E is 5.57, while trailing earnings are $4.57 per share.
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