GM looks to China market for JV sales growth

Dec. 2 (Bloomberg) -- General Motors Corp., the largest overseas automaker in China, expects to outperform the market next year, reversing a decline in sales at its local carmaking venture.
 
GM’s sales will “grow a little quicker than the market,” China President Kevin Wale said in an interview in Shenzhen last night, where he unveiled a new Buick Regal. Industrywide sales will likely rise less than 10 percent, Wale added.

The carmaker plans to add 10 new models in China by 2011 as it bids to boost emerging-market sales and win a U.S. government loan to offset sinking domestic demand. Still, Shanghai General Motors Co.‘s sales fell 1.7 percent in the first 10 months, compared with the market’s 11 percent growth, as drivers shunned its aging models for Toyota Motor Corp. and Volkswagen AG cars.

"It’s a very difficult year for GM in China," said Wang Liusheng, an analyst at China Merchants Securities Co. in Shenzhen. "The company needs to speed up the introduction of new models in the country.”

GM’s financial troubles won’t affect its plans in China, Wale said. The Detroit-based automaker, along with Ford Motor Co. and Chrysler LLC, is seeking $25 billion from the U.S. government to stave off an industry collapse.

"Our joint ventures in China are profitable and well- funded,” Wale said. GM makes cars in China through a venture with SAIC Motor Corp., the largest domestic automaker. The company also has a minivan venture in the country.

Buicks, Chevrolets

GM’s 10 new models will be evenly split between Buicks and Chevrolets, Wale said. The automaker sold 1.03 million vehicles in China last year, about 11 percent of its global total. It aims to raise annual China sales by 500,000 over three years.

The new Regal is the first GM car based on a global platform designed at the automaker’s research center in Europe. The vehicle will be offered in four variants, fitted with 2- liter or 2.4-liter engines. It’s priced from 179,900 yuan ($26,000). That compares with Toyota’s Reiz, which is available from 179,800 yuan, and Volkswagen’s Magotan, costing from about 219,800 yuan.

Tianjin FAW Toyota Motor Co., one of Toyota‘s ventures in China, boosted its sales 50 percent in the first 10 months. FAW- Volkswagen Automotive Co. posted a 10 percent increase.