GM bankruptcy to leave more for Asians

1 Jun 2009, REUTERS

TOKYO: Asian automakers have largely protected themselves from any disruption to the imminent bankruptcy filing by General Motors Corp and should gain further market share down the road, analysts and automakers said on Monday.

US government officials confirmed the 100-year-old automaker would file what would be the third-largest bankruptcy in the country's history Monday, with the aim of restructuring to better compete with lower-cost Asian automakers.

"The immediate implication is that the companies are going to get smaller and so market share is up for grabs, which means that rivals like Toyota, Honda, Nissan and Hyundai are going to gain share," said Christopher Richter, auto analyst at CLSA Asia-Pacific Markets in Tokyo.

With more details of a restructuring plan still left to be ironed out, Asian automakers repeated their concerns over the impact on the economy, jobs and car sales but otherwise said it would be largely business as usual.

Shares in Asian automakers rose on news of the planned filing. Toyota Motor Corp's shares ended up 0.3 percent at 3,820 yen, Honda Motor Co gained 0.4 percent and Nissan Motor Co put on 2.3 percent by the close.

TOYOTA EYES CALIFORNIA PLANT

Toyota said it intended to continue operating its 25-year-old California-based joint venture factory with GM, adding it had been informed by GM that the intention was mutual. A source at Toyota said, however, that GM's new owners, the US government, may have other ideas and that Toyota would have to prepare for "various scenarios."

They would include the possibility of buying GM out of the unionized plant, said the source, who was not authorized to discuss the various scenarios publicly. The plant mainly builds Toyota-badged cars, with just a small number of Pontiac Vibes made for GM. The Pontiac brand is slated to be discontinued next year.

"We hope the filing will help stabilize GM and lead to a healthy development for the US auto industry in general," Toyota, which unseated GM as the world's biggest automaker last year, said in a statement. GM alone employs 92,000 in the United States and is indirectly responsible for 500,000 retirees.

Like others in the industry, Honda, Japan's No.2 automaker and the No.4 seller in the United States ahead of Chrysler, has been stocking extra components to prevent a disruption in case a supplier went bust. It has also been buying molds from shaky providers so that it could take the equipment elsewhere for parts to be made, if necessary.

"We knew things were bad (at GM), so we had been making various preparations," a Honda spokesman said. "For the moment, we expect no disruptions to our production."