The head of General Motors Corp.'s International Operations says China, Southeast Asia and India offer the largest long-range growth potential for the carmaker, while getting into Eastern Europe is a near-term priority.
GM Executive Vice President John F. Smith Jr. also told the Automotive Press Association that countries like Spain and Portugal could suffer as potential business is diverted through new associations made in Eastern and Central Europe."But companies will not go to Eastern Europe for low wage rates alone," Smith said, adding that he believed wages, which in some cases were less than 20 percent of Western pay levels, would rise quickly and that the six-year wait for cars by consumers in Eastern bloc countries would eventually disappear.
He said one of the top priorities of GM's International Operations is to reestablish itself in East Germany after an absence of more than 40 years, and to explore the possibilities of expanding into Czechoslovakia.
"But it's still too early to tell," Smith said, adding several other automakers have already lined up to talk with Czech automaker Skoda.
Service replacement parts would also be a lucrative business for GM as sales of used Western European cars grew in Eastern Europe, Smith noted.
GM of Europe announced last month an agreement with Hungarian truck maker RABA to build engines and cars by 1992, with GM holding a 67 percent interest.
GM is also planning to establish a private sales network in Hungary in about five years' time, Smith said.
"The events of Eastern Europe have really taken the focus off EC92," Smith said, referring to the economic integration of Western Europe in 1992.
The Western European car market is now expected to grow at record levels, surpassing the 13.4 million units sold in 1989, which was about 3.5 million more cars than were sold in the United States last year.