GM predicts 15 percent sales increase in China next year
General Motors Co. expects its sales in China to rise as much as 15 percent next year as demand for vehicles gains in the world's fastest-growing major economy.
"The underlying strength of the Chinese vehicle market is very strong," GM China President Kevin Wale said in a telephone interview from Shanghai. "Our target each year is to grow in line with the market."
Demand will continue to grow in 2011 even as China phases out subsidies that boosted sales, Wale said.
The Detroit-based automaker's joint ventures will sell as many as 2.3 million vehicles on the mainland this year, he said.
Whether next year's overall market growth is closer to 10 percent or 15 percent will depend on how much the government scales back assistance, he said.
"If the incentives completely disappear, it's more likely to be in the lower end of that range," Wale said.
The nation halved a small-car sales tax to 5 percent last year to spur demand, helping the country overtake the U.S. as the world's biggest vehicle market. The tax was raised to 7.5 percent this year.
GM's sales next year will likely benefit as consumers in smaller Chinese cities buy their first cars, said Steve Man, a Hong Kong-based analyst at Samsung Securities (Asia) Ltd.
SAIC-GM-Wuling Automobile Co. aims to take a "leadership position" in China's secondary cities by introducing its new brand called Baojun, Wale said. The brand will compete with local carmakers BYD Co. and Zhejiang Geely Holding Group.
This month, GM announced it will raise its stake in SAIC-GM-Wuling to 44 percent from 34 percent. The venture builds the Sunshine microvan, China's best-selling vehicle.
