GM, VW raise China auto sales forecasts

Volkswagen and General Motors Monday raised their forecasts for automobile sales in China, as the world's biggest vehicle market continues beating expectations in spite of Beijing withdrawing some tax incentives.

Q-1 Chinese car sales rose 76% from the year earlier period to 3.52M, according to figures released by the government-affiliated China Association of Automobile Manufacturers.

Kevin Wale, head of GM in China, said the unexpectedly strong growth, which came in spite of the Chinese government tax incentive for small vehicle purchases being halved, would allow the US carmaker to hit its target of 2M sales in China in Y2010. That is 4 years ahead of schedule. GM, the largest overseas carmaker in China, expects the Chinese market to continue pulling ahead of the US market this year.

Total Chinese auto sales this year are expected to hit 17M, a 25% increase from 13.6M last year, according to the China Passenger Car Association.

VW said Monday that it would also revise its forecast upwards. Along with its 2 joint ventures, Shanghai Volkswagen and FAW-Volkswagen, the German carmaker said it delivered 457,259 cars in Q-1 Y 2010 to customers in the Chinese Mainland and Hong Kong, up 60.9% from the year earlier period.

"The Volkswagen Group's strong performance in Q-1 of Y2010 has exceeded our expectations," said Winfried Vahland, president and chief executive of VW China. "Sales in the first quarter allow us to be more optimistic."—Paul A. Ebeling, Jnr