Beijing show offers respite for weary GM execs

DETROIT -- Next week's Beijing auto show probably can't come soon enough for General Motors' top brass.

For at least a week, GM execs should be able to sidestep the chorus of questions from the media and investors about GM's game plan to stem the tide of red ink flowing from Europe.

Instead, the spotlight will turn to GM's standing in China, where it boasts the top spot in the world's largest auto market.

Last year, GM sold more vehicles in China (2.54 million) than in the United States (2.50 million). It recently posted China sales records for March (257,944) and for the quarter (745,152, up 9 percent from a year earlier), including units sold through its joint venture partners.

There was more good news this week: GM has hammered out a deal with its largest Chinese partner, Shanghai Automotive Industry Corp., to return to 50-50 ownership of its joint venture there, GM CEO Dan Akerson told The Wall Street Journal.

Amid GM's restructuring in 2009, GM agreed to cede to SAIC a 51 percent stake and a controlling interest in the venture in exchange for much-needed cash. The companies are awaiting the Chinese government's blessing on the even split, according to the Journal.

Regaining firmer control of the SAIC venture is "an extremely important development," Morgan Stanley analyst Adam Jonas said in a research note.

Jonas and other analysts have worried that GM's junior status in the venture could handcuff it on key product decisions and hurt its ability to protect its intellectual property.

Equal footing with SAIC, China's largest automaker, "is critical as [GM] rolls out global platforms and coordinates product strategy," Jonas says.

He believes the deal paves the way for the automakers to expand their efforts to Europe, South America -- even the Untied States.

So it's little wonder Akerson will keep a high profile at the Beijing show next week. He's scheduled to speak at the Automotive News China Conference.

After that, you can expect the spotlight to turn back to Europe.

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