In Spite of Challenges, GM Continues to Ride China Growth Story

April 12th, 2011 by Trefis Team
-8.87%
Downside
45.62
Market
41.57
Trefis
GM: General Motors logo
GM
General Motors

The Chinese auto market continued its unabated growth in the first quarter of 2011, despite threats such as the withdrawal of government incentive programs and the potential supply chain disruption from the tragic Japanese tsunami. General Motors (NYSE:GM), which competes with players like Toyota (NYSE:TM), Honda (NYSE:HMC), Ford (NYSE:F) and Daimler (ETR:DAI) in the Chinese auto market, reported record March and first quarter sales in China. [1]

GM’s sales in China outstripped estimated industry sales growth in Q1 2011, growing 10% from the same period in 2010 to about 685,000 units. By our estimates, GM’s operations in China contribute more than 24% to the company’s stock value, which we peg at $45. Growth in GM’s market share in China would add significant stock upside.

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Our $45 price estimate for GM stock implies a roughly 50% upside to market price.

See our complete analysis for GM stock here

Notes:
  1. General Motors Sets New March and First Quarter Sales Records in China, April 2011 [↩]