General Motors Company (NYSE:GM) sees rise of its full-size truck segment, remains worried about curtailing policies in eight more cities in China

Denver, CO, 07/12/2013 (Avauncer.com) – Shares of General Motors Company (NYSE:GM) gained 1.56% to close at $35.88 in the last trading session, close to the higher end of their 52-week range of $18.72 to $36.03.

The full-size truck segment has become more profitable than any other segment for GM. In addition, the entire industry is experiencing a boom with June’s SAAR nearing 16 million for the first time in five years. However, the future seems to be gloomy for GM, as China, the world’s biggest auto market, announces that eight more of its cities will roll out policies restricting new vehicle purchases. This was a part of Beijing’s endeavor to control air pollution.

If China implements this policy, earnings of GM will be negatively affected, since GM considers China a critical market for its sales and earnings. Such decision shall affect GM the most, as it is the largest manufacturer in the People’s Republic. With the size of investment committed in the region, such announcement can hamper GM’s future plans to expand in the country. China surpassed US as the top car market in the world four years ago, as recession hit the US.

The disadvantage is however common to all the players in the industry. However, with the size of investment made, GM shall have to take the biggest hit as it tries to restore revenues to pre-recession levels. This is in the backdrop of latest EU regulatory fiasco, which has put a serious dent on the company’s global revenues.

GM has a significant presence in South America and in other emerging countries such as India and Russia. However, the volume of sales in these countries is not large enough to make up for the lag created in other countries. Markets in India and Russia have substantial competition from local companies also.