Manufacturing News

GM's China sales rise 8% to record 2.55M in 2011

General Motors Co., the biggest foreign automaker in China, said its sales in the nation increased to a record last year, led by demand for its Buick and Chevrolet sedans.

Deliveries to Chinese dealers in 2011 climbed 8.3 percent from a year earlier to 2.55 million vehicles, the Detroit-based company said in a statement today. Sales of mini commercial vehicles and sedans at GM's minivan venture with SAIC Motor Corp. rose 4.8 percent to 1.29 million units.

GM's sales in the world's largest car market outpaced the industry's growth after it added luxury Cadillac models, introduced the local Baojun brand to cater to entry-level buyers and offered discounts on light trucks. China's overall vehicle sales slowed last year from 2010's record 32 percent increase as inflation, higher interest rates and the end of a two-year stimulus plan deterred purchases.

"They attacked the market on two ends," John Zeng, Shanghai-based director of Asian forecasting at industry researcher LMC Automotive, said in a phone interview. "In higher-end models they introduced a curvy European style which Chinese consumers liked, and in the low-end market they launched completely locally designed models."

GM will introduce more than 60 new and upgraded models in the five years from 2011 to 2015, half of them under its Buick and Chevrolet brands, the company said last April at the Shanghai auto show. GM started taking orders for its battery-electric hybrid Volt sedan in November, and its new Malibu midsized sedan will be available in China this year.

Ford Sales

Rival Ford Motor Co. also announced its 2011 China sales today, saying they had increased 7 percent to 519,390 units.

Toyota Motor Corp., Asia's largest automaker, said last week that its sales in China rose 4 percent last year to 883,000 vehicles, the slowest pace of growth in at least seven years, as natural disasters disrupted output and demand slowed with the end of government stimulus policies. Volkswagen AG's sales in China and Hong Kong increased 14 percent to 1.72 million, according to a Jan. 6 statement.

In December, GM's deliveries increased 9.8 percent from a year earlier to 196,797. Shanghai GM, the U.S. carmaker's sedan venture with SAIC that produces Buick and Chevrolet-brand cars, boosted full-year sales 16 percent to 1.2 million vehicles. In 2010, GM sales in China climbed 29 percent to 2.35 million units.

Industry Growth

Industrywide sales in China slowed last year after the government removed subsidies for rural buyers and phased out a cut in the sales tax last January. The city of Beijing also imposed quotas on new vehicle licenses to help reduce congestion on the Chinese capital's roads.

GM's sales in China last year grew at less than a third of the 29 percent pace it reported in 2010.

Total industry deliveries for 2011 may have risen 3 percent to 5 percent, the least in 13 years, according to the China Association of Automobile Manufacturers, which will release annual figures next week.

In response to slowing demand, GM cut the price of its Wuling Sunshine light trucks, which retail at about $4,400, from May. The automaker also rolled out its local sedan brand Baojun to target first-time buyers in inland provinces and less developed cities.

The carmaker aims to double deliveries in the country to 5 million by 2015 and plans to focus on expanding its luxury car brand Cadillac and its sport-utility vehicle lineup, GM's China president Kevin Wale said last month. He forecast that Chinese auto demand may expand 7 percent to 10 percent in 2012, led by demand for passenger cars, with sales of commercial vehicles probably growing 5 percent.

"The luxury market in China is going to grow very strongly," Wale said in an interview on Bloomberg Television on Dec. 21. "It's a big focus for us."

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