Sunday, April 23, 2006

GM expects Chinese sales to rise 20%

General Motors is likely to boost its share of the Chinese market further in 2006 with sales growth of at least 20 per cent, a senior executive says.
Kevin Wale, GM's managing director for China, said that the company, which is planning to launch two to three new models a year, is likely to enjoy sales growth higher than the projected 2006 market average of 15 per cent to 20 per cent.
"We're not sure if we'll be able to maintain the same level of growth (as last year) but we're looking forward to a very strong year," Wale told Reuters.
Sales in China jumped 35 per cent last year, catapulting it above Volkswagen AG as the top foreign auto seller.
China is a bright spot for the world's largest auto maker, which has turned in six straight quarters of losses, stemming largely from its troubled North American operations.
"Conservatively, we're looking at 20 per cent as solid growth for the year," Wale said on the sidelines of the Boao Forum, an annual gathering of business and political leaders on Hainan island off China's south coast.
GM's market share, defined as sales of passenger cars and commercial vehicles, including small vans and trucks, rose to 11.2 per cent at the end of 2005 from 9.4 per cent a year earlier.
Helped by the launch of two new car models, market share jumped further in the first quarter to between 13 per cent and 13.5 per cent, Wale said.
But he said GM was unlikely to sustain a share of more than 13 per cent for 2006 as a whole, even though the company plans to launch one or two more entirely new models later this year, as well as several upgrades of existing vehicles.
Apart from aiming to launch two to three new models in China every year, Wale said another objective is to expand the firm's network of about 1,000 dealerships around China.
Wale said GM, which manufactures cars in five cities in China, now had the capacity to ramp up production without building any more greenfield plants.
"We will continue investing in China over the next few years as our volume grows, but it would be in existing facilities primarily," he said.
Asked whether plans by GM's Chinese partner, SAIC Motor Corp, to roll out cars it has developed itself would have any impact on their joint venture, Wale said: "Not at all. We have a very strong relationship with SAIC.



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