GM auto sales in China to grow up to 15% annually

Sept. 16 (Bloomberg) -- General Motors Corp., the biggest overseas carmaker in China, forecast its sales in the country will grow up to 15 percent a year as economic growth spurs demand for new cars.

The company expects sales to grow between 10 percent and 15 percent a year over the next five years, Nick Reilly, the carmaker's Asia-Pacific president said at a ground-breaking ceremony for the company's new $250 million research and development facility in Shanghai.

The automaker plans to spend $1 billion a year in China to expand operations after sales growth fell behind rival Volkswagen AG in the first six months of the year. Competition in China is increasing after industrywide sales fell for the first time in more than three years last month.

"We have seen a slow-down in auto sales in China, but I am very confident that for the medium and long term China's auto market is strong,'' said Reilly. "We will keep our lead in China.''

Reilly didn't provide details about the new models the company plans to add in the country.

The Detroit-based company's growth in China contrast with North America where it shut plants after slumping demand in the U.S. led to a $15.5 billion second-quarter loss.

August auto sales in China totaled 451,300, the China Association of Automobile Manufacturers said on Sept. 9. Demand for cars in the world's second-largest vehicle market cooled as inflation neared a 12-year high and a stock market slump reduced consumers' spending power.

China sales growth at GM rose 13 percent in the first half as a lack of new models hurt demand. Volkswagen's sales gained 23 percent.