Dongfeng Motor leads GM in 2008 car sales

Dongfeng Motor Group, China's third-largest automaker, sold 14.01 percent more passenger cars in the country in 2008, outperforming General Motors as its Japanese partners lured buyers with new models. Dongfeng's Japanese partners are Honda Motor and Nissan Motor. Its other partner in China is PSA Peugeot-Citroen.

Dongfeng Motor has yet to roll out its self-developed car models, but its three car manufacturing ventures sold a total of 727,392 vehicles last year, a source close to the Chinese firm told Reuters on Tuesday.

Dongfeng's overall vehicle sales came to 1.06 million units, up 11.4 percent from a year earlier, with commercial vehicle sales up 6.1 percent at 330,530 units, said the source.

GM sold 1.09 million vehicles in China in 2008, up 6.1 percent from 2007. Sales at its car venture with SAIC Motor Corp fell 7.03 percent to 445,709 units, which the U.S. automaker blamed in part on a lack of new models.

"Dongfeng has two strong Japanese partners. Honda remains a solid performer last year and Nissan gained momentum with the help of new models such as the new Teana," said Chen Qiaoning, an industry analyst with ABN AMRO TEDA Fund Management.

After churning out foreign brands for years, Chinese automakers such as SAIC, the country's biggest, rolled out their self-developed car models.

But many automakers, such as FAW Group, a Volkswagen AG partner, is still relying heavily on foreign brands to attract buyers.

Foreign brands

Sales of Dongfeng's tie-up with Honda rose roughly 30 percent to more than 160,000 units and its passenger car venture with Nissan posted a rise of around 29 percent to more than 350,000 units, said the source.

Its venture with PSA Peugeot-Citroen, the worst performer among the partners, sold nearly 180,000 cars during the period, down 14 percent from a year earlier. But it remained profitable, the source added.

In an effort to lure customers back to the showroom, GM said it would roll out at least five new models under the Buick and Chevrolet brands over the next two to three years. Upgraded versions of Cadillac, Opel Saab models, among others, will also hit the market to strengthen its line-up.

After years of double-digit growth, China in 2008 posted three rare monthly declines in car sales as of the end of November as a slowing economy dented consumer spending.

Still, Kevin Wale, president and managing director of the GM China Group, said he expected China to remain the world's fastest growing major market over the next decade and that vehicle sales in the country would be steady in 2009.

The U.S. automaker's Asia Pacific President Nick Reilly told Reuters in December that he expected GM to "slightly outperform the market" in China next year.