American Automakers Look East


China's economy has seen quite a few ups and downs in the past months, and its automotive sector is no exception. Growth in Chinese auto sales slowed to 3.7% in August, a far stretch from its summertime high near 16% growth. But for many multinational automakers, China is the place to grow, regardless of sluggish sales.

Bloomberg reported last week that the top 10 automakers have announced investments of at least $38 billion in China in just the last two years. Since China's automobile market surpassed the U.S.' in 2009, it's no wonder these corporations have stepped up their Eastern entry.

And perhaps it is paying off. General Motors (NYS: GM) , Ford (NYS: F) , and Volkswagen have all announced sales rising faster than the overall market.

China's stimulus announcements last week provide at least two bullish reasons to cash in on China's automotive future. First, the influx of $280 billion into its economy is expected to jump-start business and reinvigorate China's "slow" 9.1% GDP growth rate. This will most directly affect the consumer power of the country's rising middle class, a population ready to cash in for car ownership. Second, a sizable chunk of the stimulus package will be used for highway infrastructure projects, improving China's transportation system and paving the way for a bevy of new cars and trucks to hit the road.

"Made in America" might have been the proud motto of car companies like Ford and GM, but "Sold in China" is the true future for these international automakers.

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