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Chinese Considering Big GM Stock Investment

Politics could be a factor in SAIC’s move.

by on Sep.20, 2010

GM's Chinese partner could seek a stake in the U.S. maker when GM launches its IPO later this year.

Will politics enter into play as Chinese auto giant SAIC weighs a potential hefty investment in General Motors stock?

Sources confirm the U.S. maker’s Asian partner is considering a large stock purchase when GM stages its long-awaited IPO, later this year.  That move is expected to help begin the draw-down of the government’s 60.1% stake in General Motors, which the Treasury took in return for its $50 billion bailout of the ailing automaker.

Itself partially owned by the Chinese government, Shanghai Automotive Industry Consortium is not only one of the largest carmakers in that booming Asian nation but also one of the leading GM partners.  Together they produce Buicks, Wuling trucks and a new line of mini-cars aimed at attracting the next generation of Chinese car buyers.  In 2009, the two sold more than 1 million vehicles in China, an all-time record.

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GM is expected to stage its Initial Public Offering shortly after the upcoming mid-term Congressional elections.  While former CEO Ed Whitacre had suggested the entire taxpayer stake in the company would be sold off at once, his successor, Dan Akerson, indicated last week that it will more likely take several years for the U.S. Treasury to recoup its entire investment.