General Motors is predicting growth of 10 percent or less for the Chinese car market this year.

 

"The news from the global economy is not terrific," says Kevin Wale, president of GM China. "But the outlook for China is robust for lots of reasons."

 

"The car market is at an early level of development but already very big," he says. "The long-term trend for economic growth is strong. The government is doing much to stimulate both the economy and its pillar car industry. We see this as very constructive."

 

Wale says that GM's brush with bankruptcy in North America has taken a toll on the company's Chinese investment. "In a globalized business you can't have some deferrals in the U.S. that don't have some effect" elsewhere, he said.

 

Nonetheless, Wale insists that all of GM's key China projects remain on track.

 

These include five new or redesigned models each for the Chevrolet and Buick brands launched over the next two or three years. Construction will continue on schedule at GM's Anhui proving ground and its new regional headquarters in Shanghai. Production at a new SAIC-GM-Wuling engine plant in Qingdao will go ahead according to plan.

 

GM's brush with bankruptcy is common knowledge among the Chinese public. Yet Wale rejects the suggestion this may be resulting in a loss of confidence.

 

"The consumer understands we've got a strong business here in China. They know we've got a strong partnership with SAIC. That's what they focus on," he says.

 

Wale acknowledges that the strengthening yuan slows exports of components to GM plants in other continents.

 

"That makes it harder to source from China," he says. "But some of our suppliers here have shown good improvements in productivity, and labor costs are still low."