GM introduces new cars in China to regain growth rate

April 13 (Bloomberg) -- General Motors Corp., whose first- quarter sales growth in China lagged behind rivals, has introduced two new models to drive its expansion in the world's second-largest auto market.

GM will sell a revamped Excelle car and an imported Buick Enclave sport-utility vehicle in China. Sales of Buick-brand vehicles may reach 400,000 units this year, Ding Lei, president of GM's passenger car venture in Shanghai, said at the launch of the new models last night.

"We'll use more integrated global resources to develop more cars for China in the next decade,'' said Ding. "The brand has got its root in China.''

The U.S. carmaker, relying on overseas customers to counter falling demand at home, is seeking to attract Chinese buyers who have preferred Volkswagen AG's Skoda Octavia and Ford Motor Co.'s Focus over the Buick Excelle. A slowdown in China sales may hurt GM's chance of extending its 76-year reign as the world's largest automaker.

"GM's China sales may regain power and accelerate again starting next year,'' said Huang Zherui, an analyst at CSM Asia in Shanghai. "The company needs time to shift product line-ups with more Chinese consumer-oriented cars.''

China surpassed the U.S. to become the largest market for Buick cars in 2005. Buick sales in China reached 350,000 units last year, according to Ding.

The largest overseas automaker in China boosted sales 7.4 percent to 311,512 cars and light trucks in the first three months, lagging Volkswagen's 33 percent and Ford's 47 percent growth.

GM added at least six models in China in the first three months, while Volkswagen introduced 13.

"Volkswagen is very aggressive in marketing this year, given the opportunity as an Olympic sponsor,'' said Huang."`With this background, GM looks a bit weak.''

China's first-quarter vehicle sales totaled 2.58 million, according to the China Association of Automobile Manufacturers. Passenger-car sales have grown by more than half in the last three years, in line with the country's surging economy.

GM, battling Toyota Motor Corp. to extend its reign as the world's largest carmaker, expects to sell 75 percent of its vehicles outside the U.S. within a decade. The Detroit-based automaker's sales in China grew 19 percent last year, the slowest expansion in at least five years.

The U.S. carmaker sold 1.03 million vehicles in China last year. Volkswagen's China sales rose 28 percent to 910,491 vehicles in 2007.