The FINANCIAL — General Motors Co. said on January 4 that 2009 sales in China soared 67%. The U.S. automaker also said that it expects sales will rise further this year.
China is widely expected to overtake the U.S. as the largest market for passenger vehicles in 2010, and GM has been expanding its share of the fast-growing market. The company's sales in China likely grew more in 2009 than the country's overall auto market, according to The Wall Street Journal. GM sold a record 1.83 million autos in China last year, the company said in a statement Monday.
"Despite the sales records in 2009, it looks as if 2010 will be even stronger," Kevin Wale, president and managing director of GM China Group, said in the statement, the same source reports. "The industry outlook is strong and we expect more growth, albeit on a somewhat slower pace."
Beijing has helped to boost auto sales with tax cuts and subsidies for drivers to shift to cleaner, more fuel-efficient cars. Most of that aid has gone to Chinese makers of smaller cars, though foreign producers also see sales rising, according to USA Today. GM and other automakers are looking to first-time buyers in smaller Chinese cities to help drive sales as incomes outside the country's prosperous east coast rise.
GM said its SAIC-GM-Wuling joint venture with local partners Shanghai Automotive Industries Corp. and Wuling became the country's first automaker to exceed 1 million units in annual sales in 2009. It said sales rose 63.9% to 1.06 million vehicles, the same source reports. Sales by Shanghai GM, a joint venture with SAIC, rose 63.3% to 727,620 units, GM said.
GM, whose joint ventures and wholly owned companies employ 32,000 people in China, has thrived as brisk economic growth has boosted demand for autos and turned the world’s most populous nation into the world’s biggest auto market, according to Forbes. Chinese companies, partly with help from state-owned banks, have been snapping up assets from struggling U.S. auto makers. Among them, Ford last month reached a tentative agreement to sell Volvo assets to Geely, a non-government owned Chinese automaker.
GM’s sales rose last year as the company added new models to its China lineup, including a new Buick LaCrosse and Cadillac SLS. Shipments were also helped by an agreement with China’s FAW Group to produce light-duty trucks and vans. FAW-GM sold 34,000 vehicles in the four months after it was established in August, as the same source reports. Yet it is with SAIC that GM is most active. The two companies, which have been working together since 1997, said last month that they would form a joint venture to expand in emerging markets, starting with India. The formation of an India joint venture is expected to be finalized in 2010, GM said last month. It will produce and sell cars using GM’s existing network and widen GM’s existing product line in the country.
For the January-November period, GM's sales in China rose 64% to 1.64 million units from a year earlier. In the U.S., its sales fell 31.8% to 1.86 million units during the period, according to The Wall Street Journal. GM increased its market share in China by 1.3 percentage points to 13.4%, it said. "As China asserts itself as the world's largest vehicle market, our domestic operations will be counted on to deliver solid results," Wale said.
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