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GM Sees Opportunity In Emerging Markets

Restructured GM, expected to conduct an IPO this fall, is strong in several key emerging markets.
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DETROIT (

TheStreet

) -- When the IPO by iconic American industrial power

General Motors

comes to market this fall, much of its growth potential will come from the world's emerging markets.

GM is a major player in three of the four BRIC countries -- Brazil, Russia and China -- Tim Lee, president of GM International Operations, told about 200 analysts, bankers and investors gathered in Warren, Mich. on Tuesday. The region is expected to produce 45% of the auto industry's growth through 2014, GM said.

In the BRIC countries, GM has a 13% market share, better than its worldwide share of 11.2% and far ahead of second-place

Volkswagen

, which has a bit less than 10% share in BRIC countries. In China, which passed North America as the world's largest vehicle market in 2009, GM is the sales leader with a 13.3% share. In fact, GM has been China's biggest automaker for five years. This year, "we expect 20% growth in the market

and we will have a marginal increase in share," Lee said.

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Brazil, the world's fourth-largest auto market, is the second largest Chevrolet market in the world, and GM is the third leading automaker with 19%. Overall in South America, which had 25% of emerging market sales in 2009, GM is first with 20% of the market and is in the top three in every major market.

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Not to say that GM leads everywhere. In India, which Lee said "will be the second fastest growing market of the emerging markets over the next decade after China," GM has just 3%. And in Thailand, Indonesia and Malaysia, which combined are as big as Western Europe in population and have about two million annual vehicle sales, GM's share is below 2%. "We expect to grow our share with products specifically for

these markets," Lee said. In Korea, GM busily makes cars for export, but has had a tough time cracking the domestic market, he said.

Of course, GM is not the only automaker looking to emerging markets for growth. Rather, BRIC is "a global battleground," Lee said. As for Brazil, "today, everybody's there," said Jaime Ardila, president of GM South America. For instance,

Ford

(F) - Get Report

, which ranks fourth,

plans to spend $2.4 billion in Brazil between 2011 and 2015.

In the slower growth markets, GM is holding its own. In North America, its four core brands maintain a market share of about 20%, about the same as GM had a year ago with eight brands. Industry vehicle sales, expected to total close to 12 million this year, could reach 17.5 million in 2014, said Mark Reuss, president of GM North America. That is potentially another growth area for GM shares.

In Europe, the company is recouping from its efforts to sell Opel, said Mark James, CFO for Opel/Vauxhall. The company has chosen instead to restructure with capacity cuts and layoffs. The plan is to break even on earnings before interest and taxes by 2011.

-- Written by Ted Reed in Charlotte, N.C.