GM keeps growing in China

The US' largest automaker, GM, which may be on the verge of bankruptcy due to huge losses, said it will continue to invest vigorously in China.

The company will invest $1 billion in China a year to support expansion, according to a company statement.

GM sold 1.1 million vehicles in China last year, a year-on-year increase of 6.1 percent, compared with a 22.7 percent decline in GM's home market in the US. Chinese sales accounted for 10 percent of the global total.

The company sold 111,282 vehicles in China in January, an increase of 3.3 percent year-on-year, despite the global economic slowdown's impact on auto sales.

GM said it expects vehicle sales in China to remain steady in 2009.

Sales across the industry may grow between 5 percent and 10 percent this year, GM Asia-Pacific President Nick Reilly said. The automaker expects its own growth to outperform the market by as much as 3 percentage points, he added. Its expansion plans in China bank on this expected growth.

China has scrapped some road taxes and given subsidies to rural vehicle buyers after economic slowdown caused auto sales to fall in five of the past six months. The government's rural sales push has particularly benefited GM's SAIC-GM-Wuling Automobile Co venture, the largest minivan-maker in China, said Reilly.

The Detroit-based automaker expects to increase its market share in China to 10 percent, up from 9.2 percent last year, by adding dealerships and new models, he said.

GM makes cars in China through a venture with SAIC Motor Corp, the largest domestic automaker. SAIC also holds a stake in GM-Wuling.

The company said China will remain the world's fastest-growing major market over the next decade.

Car ownership in China is less than 5 percent of the country's total population, in the US its 79 percent, which means China's auto market has much better potential, said Wang Shi, vice-president of GM China at a forum on Feb 27.

(China Daily 03/16/2009 page8)