GM's March auto sales in China exceed U.S.

General Motors Co.'s sales in China set a monthly record in March, helping to cement China as the U.S. auto maker's biggest market so far this year.

GM said Friday it sold 230,048 vehicles in the country in March, a 68% gain from a year earlier, compared with 188,011 vehicles in the U.S., a rise of 21%. Last year, the U.S. market was still the biggest for GM, with about two million vehicles sold, compared with China's 1.83 million vehicles..

For the full first quarter, GM's sales in China rose 71% to 623,546 units, compared with 16% growth to 475,253 units in the auto maker's home market, where it is gradually recovering from the credit crisis and a bankruptcy-protection filing last year.

Toyota Motor Corp. said Thursday its China sales rose 33% to about 61,200 units in March, as the company used sales incentives amid fallout in the country from a massive global recall to fix faulty gas pedals and leaking oil hoses. Ford Motor Co.'s first-quarter sales in China rose 84% to 153,362 units. Industrywide sales data haven't yet been released.

Auto sales in China were badly crimped by the financial crisis in last year's first quarter, and sales growth is expected to slow this month as the year-over-year comparison becomes more challenging. April last year was when China sales gained significant momentum, rising 25% after a mere 5% gain in the preceding month.

China, which has overtaken Japan as the world's largest vehicle producer, overtook the U.S. last year to become the world's biggest auto market by units. Sales rose nearly 50% to 13.6 million vehicles, while in the U.S. they fell 21% to 10.4 million. However, analysts note that the average price of vehicles sold in China remains significantly lower than in the U.S.

Chinese consumers have shown a preference for smaller vehicles such as BYD Co.'s F3, GM's Buick Excelle and Hyundai Motor Co.'s Elantra–a trend helped by government measures, including a halving of the purchase tax on small cars.

Demand for GM's smaller models such as the Chevrolet Cruze and New Sail have been particularly strong, the company said.

"This is a clear indicator that many consumers across the country, especially first-time car buyers, are placing smaller, more fuel-efficient products at the top of their shopping lists," Kevin Wale, GM China Group president and managing director, said in a statement.

Separately, the company's South Korean unit, GM Daewoo Auto & Technology Co., said Friday it narrowed its loss last year despite sharply lower sales.

"Our sales volume was hit by the economic downturn, which drove down demand globally," a company spokesman said. "But this year we are aiming to turn around."

GM Daewoo posted a net loss of 343.75 billion South Korean won ($305 million) in 2009, compared with a net loss of 875.69 billion won the previous year. Operating profit fell 47% to 155.10 billion won, while sales fell 23% to 9.533 trillion won.

The spokesman said a product mix centering on smaller vehicles didn't contribute much in terms of profitability.

GM Daewoo President and Chief Executive Mike Arcamone said early last month that the company is targeting domestic sales growth of more than 20% this year and export growth of 13%, including complete knockdown units, helped by new models and revived demand. It also aims for a domestic market share of more than 9.9%.

In 2002, GM took over Daewoo Motor Co., an affiliate of the defunct Daewoo Group. GM Daewoo is a manufacturing base for mini and small vehicles for the Detroit-based car maker.

GM Daewoo sold 166,127 vehicles in the first quarter, up 23% from a year earlier. Domestic sales totaled 26,644, up 43%, while exports rose 20% to 139,483 vehicles.