Global carmakers inspired by China market for growth

Shanghai, July 9 (Gasgoo.com) Many global car-making giants said on Tuesday their sales in China's booming market had steady growth in the first half of 2008, an inspiration for most of them that have seen demand slump in their home markets and are planning to boost their market shares in this fast-growing economy.

GM, the largest U.S. automaker, said it sold 590,126 vehicles in China in the first six months, up 12.7 percent year-on-year. Kevin E. Wale, president of GM China, said the company's multi-brand strategy was taking effect. New models of brands such as Chevrolet, Buick, Cadillac and Wuling are all well received by Chinese consumers.

Ford said its sales rose 21 percent to 172,411 units. Sales of passenger vehicles locally made by Changan Ford Mazda Automobile Co. Ltd., a joint venture of Chongqing Changan Auto, Ford Motor and Mazda Motor, rose 25 percent to 116,903 units.

Volkswagen's sales in China rose 23.3 percent year-on-year to 531,612 units in the January to June period. Sales of Volkswagen-branded vehicles were up 15.7 percent to 439,218, including 5,797 imported units, the company said yesterday. Sales of Audi-branded vehicles grew 23.1 pct to 60,509, including 6,721 imports.

Also on Tuesday, Japan's Honda Motor said its sales in China rose 21.3 percent year-on-year to 186,991 vehicles during the first half of 2008. The growth rate exceeded that in its home market and other overseas markets. In the first six months, Honda's sales shrank in Japan and grew merely 4.1 percent in the United States.

Major U.S., European and Japanese automakers are investing heavily with their local partners to expand production and sales in China, the world's second-largest vehicle market after the United States. In order to cushion the impact of rising gas prices and sagging home sales, foreign auto-makers are competing aggressively in China, where sales are expanding at double-digit rates.

Auto sales in China have been largely unaffected by high global oil prices because government controls have kept retail gasoline and diesel prices at levels that are among the world's lowest. Automakers say sales of SUVs and luxury sedans are growing at annual rates of up to 100 percent. China's passenger-car sales rose 15 percent last month to 588,300, bringing the first-half total to 3.61 million, the China Association of Automobile Manufacturers said earlier this week.

Wale said the industry should put priority on developing more energy-efficient, environment-friendly vehicles. Under the pressure of rising oil prices, GM's new growth point would be developing vehicles with new energy-saving technologies, including hybrid technology. The U.S. auto sales plunged in June to a 15-year low, but a month-end clearance sale helped GM retain its No.1 spot.

"Despite challenging events that had significant impact in China and on the economy as a whole this year, we were still able to achieve healthy growth through the first six months," said Robert Graziano, president and CEO of Ford Motor China, in a written statement.

Volkswagen plans to raise its production capacity in China through productivity improvements, it said in the statement yesterday. The German automaker opened a new factory in April with a capacity of 60,000 vehicles a year. Its total China capacity is 1.08 million, according to the company.

The Chinese auto market would continue booming, despite the mounting production cost and surging fuel prices, said Zhu Linjie, an executive with the Honda China company. He added Honda was expecting 20 percent annual sales growth this year in China, which is Honda's fastest-growing market worldwide.
 
China's auto market has been driven by fast-rising incomes in an economy that is forecast to grow by at least 9 percent this year.