General Electric Plans Acquisition and Chinese Automakers Eye U.S. Market

The Dow Jones Industrial Average is up more than 100 points, or 0.65%, in midafternoon trading after the Commerce Department said the U.S. trade gap fell 12.9% to $34.3 billion in November, which was the smallest deficit since October 2009. Tuesday's report leads economists to believe the pace of U.S. growth in the fourth quarter will be stronger than expected. With that positive economic data, and the Dow on the rise, here are a couple companies making news. 

Inside the Dow Jones Industrial Average, General Electric  on Monday announced plans to acquire cell research divisions from Thermo Fisher Scientific for $1.06 billion. The acquisition is another step in the right direction for General Electric as it moves away from its North American retail finance business, which it plans to spin off, and focus on other segments.

This new deal will boost the conglomerate's health unit and will further aid GE's focus on developing new medicines and vaccines in life sciences.


"Life Sciences is one of our strongest and fastest-growing business areas, driven by the world's demand for improved diagnostics and new, safer medicines," said John Dineen, chief executive of GE Healthcare, in a press release. "This deal makes a good business even better and will help us realize our vision of bringing better health care to more people at lower cost."

Outside of the Dow Jones Industrial Average, General Motors reported Tuesday that it and its joint ventures sold a record 3,160,377 vehicles in China last year. That's a sales improvement of 11.4% from 2012, and equates to GM selling a vehicle every 10 seconds. 

Despite recent recalls of more than 1.5 million Buick Excelle and Chevrolet Sail units in China, Buick sales in China increased 15.7% in 2013 to finish with nearly 810,000 units sold for an all-time high. In similar fashion, Chevrolet also set a record with an increase of 8.5% in 2013, to slightly more than 650,000 units.

Another great storyline for investors is General Motors' luxury brand's success in China. Cadillac sales last year were up 66% from 2012, led by sales of 26,897 SRX units and 20,101 XTS units.

Domestic automakers, including Ford and GM, have been focusing on China's growing automotive market, which is already the world's largest. However, investors would be wise to remember that China may be eyeing our market sooner than expected.

Chinese automakers are poised to begin hitting showrooms in America as soon as 2015, including BYD, the Chinese company backed by Warren Buffett's Berkshire Hathaway

"Entering the U.S. market carries more symbolic meaning to brand building than actually boosting its bottom line," said Han Weiqi, an analyst with CSC International Holdings in Shanghai, according to Bloomberg. "They really need to make sure cars they deliver there have sound quality in order to avoid adverse impact."

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The article General Electric Plans Acquisition and Chinese Automakers Eye U.S. Market originally appeared on Fool.com.

Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford and General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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toosmart4u

Wondering if China, to sell vehicles in America, needs a partner here like our companies need to do in China. They are already buying up American auto parts manufacturing companies.

January 08 2014 at 2:31 AM Report abuse rate up rate down Reply