NEW YORK (TheStreet) -- General Motors (GM) shares are down 1.5% to $34.69 in trading on Tuesday after the Michigan-based automaker cut prices in China on 40 vehicle models due to flagging sales in the country.
GM said that it will cut prices by as much as $8,700 on vehicles from its Buick, Chevrolet and Cadillac brands, joining other foreign automakers who are slashing prices in an effort to capitalize on the burgeoning car market in Southeast Asia. The company reported a 5.6% drop in April Chinese Chevrolet deliveries, while Buick deliveries fell by 8.5% last month.
China's vehicle market grew by 24% annually between 2005 and 2011, according to a McKinsey and Co. report, and while growth is expected to slow to 8% annually for the next five years, the Chinese car market is expected to surpass 22 million vehicles annually by 2020.
Late last year GM announced plans to invest up to $14 billion in the country by 2018 as it looks to open five new assembly plants in an effort sell 5 million vehicles per year in the country.
Separately, yesterday GM announced that the death toll related to its faulty ignition switch recall last year has reached 100 people. The fund set up by the company to review ignition switch injury claims still has 626 applications left to review out of over 4,000 that were submitted during the eligibility period between last August and January 31 this year.
Last month, the company announced that it is raising the estimated amount of its recall related injury compensation fund to $550 million from $400 million.